Monetary donations to churches in the USA are made voluntarily and directly to the churches. As a consequence, if a member of a church wants to skimp on her donations, she can easily do so, and it is difficult for a religious leader to know if the person donated a fair or proper amount. Our economic senses should be tingling here. There's a clear free-rider problem, and we should expect there to be quite a bit of free riding (or easy riding) as people hold back on contributing proper amounts.
Hence, the "church tax." Under a church tax, the government works in tandem with religious groups in the collection of donations. The proper donation amount (e.g., a particular percentage of income) is taken directly out of the person's paycheck, given to the government, and then passed from the government to the church. The government already acts as a tax collection agency for itself because it removes regular government taxes from paychecks, but with a church tax, the government also becomes, in effect, a tax collection agency for the church.
By having the government collect the donations straight from paychecks, the church is able, in theory, to receive much larger donations from those persons that are skimping in their donations. For one, the government can just take the donation directly, bypassing altogether the individuals' temptation to free ride. But if a Catholic individual claims to not be Catholic to become exempt from the tax, then the government can report that claim to the church, and then the church can without religious services from that individual. Read an earlier post about the church tax in Germany here.
Why bring this up? Two reasons.
First, this is a form of government intervention in religion, and we will soon be discuss government interventions in religion in lecture. So this is a opportunity for you to learn about actual church-state religions around the world.
Second, just last month, Catholic Archbishop Cyprian Kizito Lwanga of Kampala, Uganda, asked the Ugandan government to institute a church tax for Ugandan Catholics. Read the story here. The Archbishop had the German church tax in mind when making this request. Identify the reasoning for the Archbishop's request for the church tax, but also identify the reasoning used by those who dislike the request.
Do you think that instituting a church tax in Uganda is a good idea? Why or why not? Will instituting help the Catholic Church in Uganda? Or will it hurt? What might be the effects of a church tax in the short run? What might be the effects in the long run?
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