Vatican banker: Higher taxes won’t solve economic crisis

The president of the Vatican Bank, Ettore Tedeschi, recommends avoiding ‘deceptive simplifications’ when trying to find solutions to the world’s economic crisis.

The Vatican banker warns that higher taxes are not a solution to the current economic crisis and that higher taxes merely create a higher level of public spending.

Rather, he said, ‘authentic global solutions’ must be found. Solutions that take into consideration the cause of the problem.

“During a prolonged crisis, inheritance taxes, new forms of taxation or similar alternatives reduce or wipe out resources for investments, discouraging the trust of investors, penalizing the cost of the public debt and the possibilities of its renewal at its expiration,” he wrote in the L’Osservatore Romano.

“In this context, imposing taxes on property and on income is equivalent to a suicidal anti-subsidiarity of the state to the citizen.”

“High taxes penalise saving, generate distrust in the ability to stimulate recovery, hit families and prevent the formation of new ones, as well as creating uncertainty and precariousness in employment,” he said.

“In short, they (increased taxes) lay the foundations for another phase of unsustainable development.”

Tedeschi’s comments come at a time when Italy faces the prospect of drastic cuts to balance its budget in the years to come and a growing number of Italians are criticising massive tax breaks given to the Roman Catholic Church.

A Facebook page set up by leftist campaigners in recent weeks asking the Vatican to help ease austerity in Italy has already collected 130,000 supporters and asks for numerous exemptions given to the Church to be revised.

‘Vatican’ supporters say that the tax breaks are not as extensive as sometimes reported and are justified because the Catholic Church plays an important role in social welfare, complementing the role of the state.


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