NationStates Jolt Archive

If we in the USA removed tax exempt status from churches, would we be able to tax the Vatican as we would a corporation that was based out of the country? And not only on a federal level but a state level as well?

If we in the USA removed tax exempt status from churches, would we be able to tax the Vatican as we would a corporation that was based out of the country? And not only on a federal level but a state level as well?

You might as well ask if apples were oranges, would they have a rind?

If I thought about it, I might be able to work up a detailed and serious answer, but that is more work than I am prepared to do at the moment. The short version is: it sounds possible under the hypothetical.

If we in the USA removed tax exempt status from churches, would we be able to tax the Vatican as we would a corporation that was based out of the country? And not only on a federal level but a state level as well?

I don't think the Vatican is a corporation, instead I think it's a country. AFAIK you can't tax other countries...

I don't think the Vatican is a corporation, instead I think it's a country. AFAIK you can't tax other countries...

Ha! I wouldn't be surprised if the United States started doing just that.

I don't think the Vatican is a corporation, instead I think it's a country. AFAIK you can't tax other countries...

Good point. I assumed the OP wasn't referring to the Vatican City, but rather to the Roman Catholic Church.

Good point. I assumed the OP wasn't referring to the Vatican City, but rather to the Roman Catholic Church.

Yea. I forget from time to time the Vatican is a country.

Not the Vatican, but the Roman Catholic church, yes.

Congress has legislative power in the US and can pass laws to effect just about anything within its territory. You just have to find the movement of capital that you wish to tax.

No. We'd be able to tax each individual dioscese. But not the Vatican.

It may be worth noting that some tax exemptions for religious property have been held to be constitutional -- i.e., they do not violate the First Amendment Establishment Clause -- but some exemptions for religious publications do violate the First Amendment. Compare Walz v. Tax Comm'n (http://www.findlaw.com/scripts/getcase.pl?navby=case&court=us&vol=397&invol=664), 397 U.S. 664 (1970) with Texas Monthly, Inc. v. Bullock (http://www.findlaw.com/scripts/getcase.pl?navby=case&court=us&vol=489&invol=1), 489 U.S. 1 (1989)

The First Amendment does not seem to require a tax exemption for religious activities, however. See, e.g., Jimmy Swaggart Ministries v. California Bd. of Equalization (http://www.findlaw.com/scripts/getcase.pl?navby=case&court=us&vol=493&invol=378), 493 U.S. 378 (1990); Hernandez v. Commissioner (http://www.findlaw.com/scripts/getcase.pl?navby=case&court=us&vol=490&invol=680), 490 U.S. 680 (1989).

NOTE: In the interests of full disclosure and to cover my ass, I should make clear I am taking my analysis from Findlaw (http://caselaw.lp.findlaw.com/data/constitution/amendment01/04.html) -- and have only glanced at the cases myself. ;)

Well we have a series of problems, the first being I assume you mean the roman catholic church as an organization, not the country of Vatican City.

With that in mind, if the church was a non tax exempt organization we could treat it as a person for tax purposes that is a resident of the country of Vatican City.

Absent any specific treaty between the US at Vatican City, presumably we could tax the Roman Catholic Church for its US source income, yes. Presumably there's nothing wrong with that, the government can tax anything it wants to for the most part.

maybe, if the US wanted to find its arse excommunicated that is

If we in the USA removed tax exempt status from churches, would we be able to tax the Vatican as we would a corporation that was based out of the country? And not only on a federal level but a state level as well?

Even if it was deemed a corporate entity by our standards, it must have a state of incorporation in the US to be taxed by the US.

It may be worth noting that some tax exemptions for religious property have been held to be constitutional -- i.e., they do not violate the First Amendment Establishment Clause -- but some exemptions for religious publications do violate the First Amendment. Compare Walz v. Tax Comm'n (http://www.findlaw.com/scripts/getcase.pl?navby=case&court=us&vol=397&invol=664), 397 U.S. 664 (1970) with Texas Monthly, Inc. v. Bullock (http://www.findlaw.com/scripts/getcase.pl?navby=case&court=us&vol=489&invol=1), 489 U.S. 1 (1989)

The First Amendment does not seem to require a tax exemption for religious activities, however. See, e.g., Jimmy Swaggart Ministries v. California Bd. of Equalization (http://www.findlaw.com/scripts/getcase.pl?navby=case&court=us&vol=493&invol=378), 493 U.S. 378 (1990); Hernandez v. Commissioner (http://www.findlaw.com/scripts/getcase.pl?navby=case&court=us&vol=490&invol=680), 490 U.S. 680 (1989).

NOTE: In the interests of full disclosure and to cover my ass, I should make clear I am taking my analysis from Findlaw (http://caselaw.lp.findlaw.com/data/constitution/amendment01/04.html) -- and have only glanced at the cases myself. ;)

You've still gone one step above as usual, Cat. :)

maybe, if the US wanted to find its arse excommunicated that is

Couldn't they just start their own church or assign their own pope then?

Couldn't they just start their own church or assign their own pope then?

The trick is not starting your own church or anointing your own pope. The trick is getting other people to follow you. That's what differentiates an emperor from an old man wearing a bathrobe in a fancy chair.

As far as taxing churches, I could see the government trying it, the government will try and tax anything that moves, but I can't really see them succeeding. What would be really interesting would be to see if the same people who whine about nativity scenes in parks or depictions of the Ten Commandments on courthouse walls would muster the same fervor about this transgression of the 'separation of church and state.'

The trick is not starting your own church or anointing your own pope. The trick is getting other people to follow you. That's what differentiates an emperor from an old man wearing a bathrobe in a fancy chair.

Well, it was done before, a few times. And with the funds the USA has at it's disposal I don't think that will be a problem.

As far as taxing churches, I could see the government trying it, the government will try and tax anything that moves, but I can't really see them succeeding. What would be really interesting would be to see if the same people who whine about nativity scenes in parks or depictions of the Ten Commandments on courthouse walls would muster the same fervor about this transgression of the 'separation of church and state.'

Of course not. Because giving benefits to religion is a transgression of the separation of church and state.

If we in the USA removed tax exempt status from churches, would we be able to tax the Vatican as we would a corporation that was based out of the country? And not only on a federal level but a state level as well?


That would go against the separation of Church and State. State doesn't tax the Church, Church stays out of State affairs. That is how it works.

I'm sure you are only seeing it rather onesided. But the matter of hand is that it's a two sided blade. Once the State imposes itself over the Church, instead of co-existing as two distinct separate entities, it means that the Church can also influence the State again. Meaning nothing would prevent a Bishop from running for mayor and being leader of the Bishopry and Mayor position at the same time. As well if there is no more separation, he can enact any religious laws (which would no longer be illegal and so could theoretically be enacted since they can no longer be struck down as unconstitutional).

Is that really a road you want to tread down? I would rather not. Simply leave it be in the current status quo, it works and no one is currently forcing you to attend Church every Sunday by government mandate are they? I would like to nullify any possibility of such a thing ever happening. Hence. Don't open the Pandora's box.

"Give unto Caesar what is Caesars, give unto God what is Gods."

If we in the USA removed tax exempt status from churches, would we be able to tax the Vatican as we would a corporation that was based out of the country? And not only on a federal level but a state level as well?

No, you can't tax the Vatican because it is a foreign country.
You can tax the United States Conference of Catholic Bishops (that is the USA catholic highest authority), which isn't a foreign corporation, though.

What about the Queen of Engalnd? as head of the CofE aka Anglican church, would she get taxed by the USA?

That would go against the separation of Church and State. State doesn't tax the Church, Church stays out of State affairs. That is how it works.

Except it doesn't always work this way. Like the time when the Bishop of the church my family makes me go to decided to say a public statement right before a big election telling the churchgoers how a good catholic should vote on abortion, stem cell research, torture and gay marriage, and this was obviously right before an election also. (link: http://en.wikipedia.org/wiki/Robert_C._Morlino)

Oh and also he works on the board of visitors for the Western Hemisphere Institute for Security Cooperation, but he's allowed to do that constitutionally if he wants to, although I disagree with it. Oh and for people who say that bishops and priests should be allowed to express their political beliefs to people, I agree. However, it should not be done inside of church or during a service, because that's not supposed to be a time for politicing. However, giving a speech at say, a rally would be fine.

What about the Queen of Engalnd? as head of the CofE aka Anglican church, would she get taxed by the USA?

what is it with you and the Queen?;)

OP: If you could tax the Roman Catholic Church, then you'd probably be compelled to tax other religions too, and you'd probably get a mass movement of people wishing to practice their religion without paying for it.

Also if the US government did bring legislation through that did tax various religions, the party that represents it would lose an awful lot of voters, religion is a very important topic for a government, to tax any of them would have undesirable consequences, thus they tend to leave them alone.

However they can imprison suspected terrorists if they want, and use torture methods in Guantanimo, and own nuclear weapons but as soon as another country tries this they can told off biiiig time especially nuclear weapons.

So you could bring it through, but i think it would be more reasonable to tax them on the number of buildings they use, rather than the people directly, that way it wouldn't be quite as harsh. Maybe to say the size of windows or how long their priests beards are.

Except it doesn't always work this way. Like the time when the Bishop of the church my family makes me go to decided to say a public statement right before a big election telling the churchgoers how a good catholic should vote on abortion, stem cell research, torture and gay marriage, and this was obviously right before an election also. (link: http://en.wikipedia.org/wiki/Robert_C._Morlino)

Oh and also he works on the board of visitors for the Western Hemisphere Institute for Security Cooperation, but he's allowed to do that constitutionally if he wants to, although I disagree with it. Oh and for people who say that bishops and priests should be allowed to express their political beliefs to people, I agree. However, it should not be done inside of church or during a service, because that's not supposed to be a time for politicing. However, giving a speech at say, a rally would be fine.

Didn't the pope also try to tell senators how to vote at least once before? (I think it was during the attempt at a constitutional amendment to ban same-sex marriage, and if not then than during one of earlier stem cell research votes)


every election year, and during votes for hot button issues, churches jump into politics no problem, yet they are never punished. this thread was just a thought on how far it could go if they were.

maybe, if the US wanted to find its arse excommunicated that is

I'd post something about that not being a big deal because of the nature of God's communication with mankind through Jesus as opposed to through guys with successively larger hats giving equal weight to church dogma and the Word of God, but many people would disagree, so I won't.

Wait....

That would go against the separation of Church and State. State doesn't tax the Church, Church stays out of State affairs. That is how it works. *snip*

If only.

If Church is staying out of State affairs, why are so many consensual crimes illegal? Why did the FCC start to regulate what it's not chartered to regulate (use of "foul language", etc.) as a result of Rev. Donald Wildmon's ("can't find the tuning knob or the on-off knob") crusade?

Why are churches regularly haranguing both their flocks and political candidates about how they should stand on issues?

I say (paraphrasing Carlin) that if churches want to continue to have the kind of barely-fettered access to politics that they now enjoy (contrary to popular belief), they need to pay the price of admission like everyone else. Tax them. The Catholic Church alone could balance the federal budget if all you did was tax them on their land holdings.

Even if it was deemed a corporate entity by our standards, it must have a state of incorporation in the US to be taxed by the US.

not true in the slightest

not true in the slightest

Really? My bad I suppose, I was referring to the fact that all the US corporate tax forms I have ever filed ask for a state and date of incorporation.

Really? My bad I suppose, I was referring to the fact that all the US corporate tax forms I have ever filed ask for a state and date of incorporation.

The power to tax, generally, comes from two "types". residency and source. A "person" (which can be an individual, a partnership, a corporation, etc etc etc) who is a resident of the US for tax purposes can be taxed on worldwide income, regardless of where that income is generated. For example, if I, a US citizen, made a company in India, sold my product in India, and made all my money in India without ANY connection to the United States, the US would STILL tax me on that income (with allowances for foreign source credits which are more complex then I want to get into here).

On the other hand, "source" income is effectively the power to tax income that is derived through doing business in the United States. To use this example, if the catholic church, an entity "incorporated" in Vatican City, earns income in the US through the promotion of its "business" in the US, the money that it made through the operation of its business in the US is considered for US tax purposes as US source income, as it is connected through the carrying out of business in the US.

A foreign corporation can not be taxed on ALL its income by the US, only its US source income, namely the income it makes through doing business in the US

Isn't there another thread on this topic too?

The power to tax, generally, comes from two "types". residency and source. A "person" (which can be an individual, a partnership, a corporation, etc etc etc) who is a resident of the US for tax purposes can be taxed on worldwide income, regardless of where that income is generated. For example, if I, a US citizen, made a company in India, sold my product in India, and made all my money in India without ANY connection to the United States, the US would STILL tax me on that income (with allowances for foreign source credits which are more complex then I want to get into here).

On the other hand, "source" income is effectively the power to tax income that is derived through doing business in the United States. To use this example, if the catholic church, an entity "incorporated" in Vatican City, earns income in the US through the promotion of its "business" in the US, the money that it made through the operation of its business in the US is considered for US tax purposes as US source income, as it is connected through the carrying out of business in the US.

A foreign corporation can not be taxed on ALL its income by the US, only its US source income, namely the income it makes through doing business in the US

Good to know. I also realized I was assuming the OP was meaning a domestic corporation operating in a foriegn country.

Isn't there another thread on this topic too?


The other thread is whether or not churches should be taxed. I think that is what you are referring to. :)

Good to know. I also realized I was assuming the OP was meaning a domestic corporation operating in a foriegn country.

I took it the other way around, a foreign corporation based in vatican city operating in the US.

Which if we were to treat the catholic church like a corporation, that's how I'd see it.

*hasn't read the rest of the thread*

So... people contribute to a charitable not-for-profit organization... and people think that Uncle Sam should consider that as contributing to him? So every time you put money on the plate or pay your tithing, you get a tax write-off that gets to the government anyway? So in theory, I donate 10 dollars to the church, the government gets 3 dollars of it, and then the government pays me 10 dollars in a deduction... I know that's not exactly how it works by any means... but it just doesn't make sense.

I think if someone donates to a charity or non-profit organization, the government doesn't need to tax already-taxed money being handled by (in some cases) volunteers...

Now... paid political ranters like Rev. Wright and all those crazies who just yell at the top of their lungs endorsing candidates and protesting the government and stuff... uhh... go ahead and tax them ^_^

Couldn't they just start their own church or assign their own pope then?

Why not ask Henry VIII?

Henry had a fair bit of trouble with breaking with Rome. His entire country was excommunicated. Now Henry might not have believed or cared but several fairly powerful people in the country did. Led to lots of trouble for the Tudors AND the Stewarts. Cromwell and Ireland, the Jacobites and Scotland. Highland clearances etc. etc.

Same thing happening in a democratic superpower? Interesting. very.