As things tend to do in the Middle East, a petty financial dispute over the collection of taxes on the properties of Christian denominations in Jerusalem quickly escalated into a full-scale political and religious crisis.
Christian leaders took the nearly unprecedented step of shutting down the Holy Sepulchre; Palestinian and Arab leaders painted the issue as another instance of Israel’s discriminatory policies against minorities and encroachment on non-Jewish holy sites, and Haaretz fretted that Israel was "burning its bridges with the Christian world."
The Israeli government acted responsibly by shelving a controversial law that would have allowed the state to seize lands sold to private developers by the Orthodox and Catholic churches, and getting the Jerusalem municipality to back down from its attempt to forcibly collect property taxes on church assets used for commercial activities in the city.
Of course, had Israeli authorities not entertained the idea of passing a law that singled out deals done by Christian communities and had the municipality not started seizing church assets as payment for back taxes, the crisis would not have happened in the first place. But perhaps the government has now learned that such matters are better handled through quiet negotiations or, at worst, in a court of law, rather than with unilateral moves and public proclamations.
Now that cooler heads have prevailed, it should also be noted that the Christian leaders who led the protest are not beyond reproach. They should not have linked the preservation of their financial interests to the broader Israeli-Palestinian conflict and painted the confrontation as a battle in a war waged by the Israeli government against a helpless minority.
Such a tactic could have easily backfired, descending into a stalemate or sparking violence amid the already sky-high tensions caused by U.S. President Donald Trump’s decision to recognize Jerusalem as the capital of Israel and move the American embassy there.
Furthermore, this tactic reveals itself as disingenuous when one considers that a very similar debate over taxing the properties of religious institutions is already playing out in several other countries, like Italy and Greece, where Christians are an overwhelming majority, and the Catholic or Orthodox churches hold significant influence and political sway.
While Italy could hardly be accused of persecuting Christians, some local and national politicians there have been trying for decades to cancel tax exemptions granted to the Catholic Church and force it to pay municipal duties on its commercial properties, particularly buildings used as hotels and lavish vacation homes.
Critics say the exemptions deprive state coffers of millions in badly needed tax income and encourage unfair competition, because they allow church-owned establishments to offer lower prices.
The issue has resurfaced periodically and featured heavily in the 2016 election campaign for Rome’s mayor, which saw the populist 5-Star-Movement triumph partly on promises to have the Vatican pony up 400 million euros in back taxes (a figure that is likely exaggerated) and help salvage a city administration that, not unlike Jerusalem’s, is mired in debt.
Similar proposals have been floated by politicians and grassroots activists in Greece and Spain for the properties owned by the Greek Orthodox and Catholic churches respectively, with popular resentment over the privileges granted to religious institutions growing in parallel to the financial woes of these countries and the increasing fiscal burden on their citizens.
As is the case in Jerusalem, proponents of cancelling the exemptions stress that actual places of worship would continue to remain tax-free and the state would only levy duties on assets that are used for commercial purposes, such as hotels, hostels, private clinics and schools. Religious leaders generally respond that while those activities may turn a profit, the money is then used for charity and other good causes supported by their institutions.
The debate has pitted secular versus Christian politicians in parliaments, and has played out in the media and the courts, with some cases even reaching the European Court of Justice, amid charges that the tax breaks constitute an illegal form of state aid.
But it is quite unheard of for this contentious financial issue to lead to the closure of a major shrine or for spiritual leaders to frame it as a holy war against Christians.
In fact, back in 2015, even Pope Francis appeared to support those who think the church’s commercial properties need to come clean with the local tax man.
"A religious college, being religious, is tax-free, but if it serves as a hotel then it should pay its dues," Francis said in an interview to a Portuguese radio station that was widely circulated by Italian media. "Some congregations say, "Now that the convent is empty, let’s turn it into a hotel so that we can receive guests, support ourselves and earn money." Well, if that’s what you wish, then pay your dues. Otherwise, the business is not clean."
Religious organizations in Italy and elsewhere clearly haven’t rushed to heed the pontiff’s words, and Rome’s municipality has been slogging it out in court for years as it attempts to collect some 20 million euros in back taxes from various Catholic institutions. One technical question on which the jurisprudence is still unclear is what happens to properties that are used for mixed purposes, like a hostel for pilgrims where religious services are held.
This complexity helps drive home the point that figuring out the tax profile of church properties is not an attack on freedom of religion but a highly intricate financial and judicial question, which arises naturally from the increasing separation between church and state in modern secular democracies.
Back in the day when this line was blurred (or nonexistent), it was easy for jurists to dismiss any suggestion of imposing taxes on religious properties by using the old Latin dictum that "ecclesia decimas non solvit ecclesiae" ("the church doesn’t pay tithes to the church") - because that would simply mean moving money from one pocket to another.
Now that those pockets no longer have the same owner, church leaders can find it hard to renounce millennia-old privileges.
But ultimately, they might have to fall in step with the 2,000-year-old advice of one Jesus of Nazareth, who, when asked whether Jews should pay taxes to the Roman state, picked up a coin decorated with the emperor’s effigy and famously told the faithful to "render unto Caesar that which belongs to Caesar."
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