The Bad News: Tax Evasion is Still In

Remember the old joke about Moses coming down from the mountain:

The good news is--I’ve got him down to ten.

The bad news: adultery is still in.

Apparently tax evasion, also, is “still in” (link):

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.

Reports I’ve seen so far don’t seem to mention the point, but this seems to be something of a turnaround for the church. Apparently just a few days ago, Silvio Berlusconi’s favorite priest was still telling Italian media that tax evasion was “not a sin” (link). He’s got a lot of flac for that, but up until today, I think he may have had some church law on his side. I can’t put my finger on it just now, but my recollection is that a 19^th-Century pope (my bet is on Leo XIII while Prisoner of the Vatican), embraced exactly that view as part of his standoff with the nascent Italian state: no duty to pay taxes to what was, after all, in the eyes of the Papacy, an illegal Italian state.

Consider also Pius XI: “Wherefore the wise Pontiff,” we are told, “declared that it is grossly unjust for a State to exhaust private wealth through the weight of imposts and taxes” (link). Continuing, he may seem to waffle:

"For since the right of possessing goods privately has been conferred not by man's law, but by nature, public authority cannot abolish it, but can only control its exercise and bring it into conformity with the common weal."[36] Yet when the State brings private ownership into harmony with the needs of the common good, it does not commit a hostile act against private owners but rather does them a friendly service; for it thereby effectively prevents the private possession of goods, which the Author of nature in His most wise providence ordained for the support of human life, from causing intolerable evils and thus rushing to its own destruction; it does not destroy private possessions, but safeguards them; and it does not weaken private property rights, but strengthens them.

50. Furthermore, a person's superfluous income, that is, income which he does not need to sustain life fittingly and with dignity, is not left wholly to his own free determination. Rather the Sacred Scriptures and the Fathers of the Church constantly declare in the most explicit language that the rich are bound by a very grave precept to practice almsgiving, beneficence, and munificence.

51. Expending larger incomes so that opportunity for gainful work may be abundant, provided, however, that this work is applied to producing really useful goods, ought to be considered, as We deduce from the principles of the Angelic Doctor,[37] an outstanding exemplification of the virtue of munificence and one particularly suited to the needs of the times.

…but I don’t think there is a real waffle here: he’s just saying spend it right¸ or invest.