Pope Benedict will produce on a new doctrinal announcement that will declare tax evasion a social injustice. The focus, says the Times of London, comes from a budget crisis in Italy, where avoiding taxes has become as much of the culture as good food and flirting. Outside of Italy, Catholics might wonder when rendering unto Caesar went from unpleasant necessity to honored status:
Pope Benedict XVI is working on a doctrinal pronouncement that will condemn tax evasion as “socially unjust”, according to Vatican sources.
In his second encyclical – the most authoritative statement a pope can issue – the pontiff will denounce the use of “tax havens” and offshore bank accounts by wealthy individuals, since this reduces tax revenues for the benefit of society as a whole.
It will focus on humanity’s social and economic problems in an era of globalisation. Pope Benedict intends to argue for a world trade and economic system “regulated in such a way as to avoid further injustice and discrimination”, Ignazio Ingrao, a Vatican watcher, said yesterday.
The encyclical, drafted during his recent holiday in the mountains of northern Italy, takes its cue from Pope Paul VI’s encyclical Populorum Progressio (On the Development of Peoples), issued 40 years ago. In it the pontiff focused on “those peoples who are striving to escape from hunger, misery, endemic diseases and ignorance and are looking for a wider share in the benefits of civilisation”. He called on the West to promote an equitable world economic system based on social justice rather than profit.
Benedict should take a lesson from his predecessor, who came from an economic system that theoretically based itself of “social justice”. John Paul II understood what happens in systems where the state manages of economic systems for their idea of social justice — and no other management can be possible without the profit motive. Once profit gets removed from economic systems as a regulator for investment and control — i.e., the one who invests and profits makes the decisions controlling the investment and use of the profit — it takes an autocracy to decide the goals of investment for the purposes of social justice.
It didn’t work out well in Poland for John Paul, nor in Soviet Russia and China, where millions died in famines thanks to ridiculous central agricultural planning. State-run economies always claim to champion social justice and equitable distribution. Even Robert Mugabe used those goals to seize productive farms from their owners and turn them into wastelands for “the people”. Only free and mildly-regulated capitalist systems produce for the entire spectrum of people and raise standards of living.
And the tax evasion argument is simply absurd, especially in America, where the Catholic Church pays no taxes at all. Giving money to the state does not guarantee social justice, and in many cases funds efforts that the Church considers very unjust. In California, for example, taxes pay for embryonic stem-cell research. Is it social justice to pay more taxes than the law requires into that system?
Note that Benedict is not just talking about illegal tax evasion, either. He’s also reportedly working on a scolding for businessmen who legally incorporate offshore to reduce their tax exposure. While that may deny their native country some measure of taxes, it also promotes business in these other countries that helps with their economies and likely their tax base as well, at least from employment.
Mostly, though, the equation of taxes with social justice offends at a more basic level. Christ understood that the temporal governments of his time did not offer social justice but ruled through force and threat of force to impose civil peace and offer basic services. We should not break laws to evade taxes, which is what Christ said. Turning governments into churches to which we must tithe for social justice seems more than a little off message.