In a few weeks, the conclave will gather in the Vatican’s Sistine Chapel to cast a series of votes to choose the next pope. One of the questions that will surely be top of mind for those tasked with the choice is whether the next pope will carry on the legacy of Pope Francis.
Francis was elected in 2013 after Pope Benedict XVI retired. He is the first Latin American pope in history and the first pope to be a member of the Society of Jesus, more commonly known as the Jesuits. The Jesuits are one of the most prominent religious orders in the Catholic Church, comprising approximately 15,000 priests, brothers, and novices from over 110 countries. Jesuits famously take a vow of poverty, which is not a literal commitment to material poverty but rather a goal to live a life that mirrors the poverty of Jesus. That background likely inspired much of Francis’s papacy, including his views on money and taxation.
During his lifetime, Francis consistently emphasized that taxation is a moral imperative and has called for a fairer tax system to benefit everyone, especially the poor. That means, he has insisted, that the wealthy should contribute to the common good. As part of his overall message, he has argued against tax evasion and tax havens
In a 2022 address to Italy’s Revenue Agency, Francis described taxation as “a sign of legality and justice.” The scriptures, he noted, regularly reference taxation. “The Bible,” said Francis in his speech, “does not demonize money, but offers an invitation to use it correctly, to not become slaves to it, and not to turn it into an idol.”
(Interestingly, Vatican City is supported financially by donations and tourism-related income. The country does not have any taxes.)
Wealth Redistribution
Francis has consistently emphasized that the wealthy should pay taxes, claiming, “[Taxation] must favor the redistribution of wealth, safeguarding the dignity of the poor and the least, who always risk being trodden underfoot by the powerful.” And in 2021, Francis publicly condemned targeted tax cuts that benefit only one class. Speaking at a meeting with global economic ministers, he declared, “Structures of sin today include repeated tax cuts for the richest people,” suggesting that it exacerbates inequality.
Last year, he reiterated this stance, noting that a lot of the resistance to raising taxes on the rich comes from those who are in positions of power. That has resulted in inequality, he said, noting, “some of the richest men in the world recognize that the system that allowed them to amass extraordinary fortunes—allow me to say, ridiculous [fortunes]—is immoral and must be modified.” And repeating a refrain that has become more popular in some circles, including in the U.S., Francis declared, “[T]here should be more taxes on billionaires.”
This sentiment appears to be shared by Cardinal Pietro Parolin, the Vatican secretary of state, and a strong contender for the papacy following Francis’ death. In February, Parolin told participants in a workshop sponsored by the Pontifical Academy of Social Sciences that there is a moral obligation to assist those most in need. “Taxation should promote the redistribution of wealth and protect the economically disadvantaged,” said Parolin. A fair tax system, he noted, promotes the common good by ensuring the poorest at least have their basic needs met.
Tax Evasion
Over the years, Francis decried tax evasion by individuals and corporations. According to the Global Tax Evasion Report 2024, tax evasion by wealthy individuals has declined by a factor of three over the last ten years. That is, the report notes, thanks to the automatic and regular exchange of bank information between some countries, including the U.S.
Francis took steps during his papacy to address financial transparency between the Vatican and other countries, including boosting the exchange of information with the U.S. For example, in 2015, the U.S. and Vatican City signed an agreement to improve international tax compliance, specifically to implement the terms of Foreign Account Tax Compliance Act (FATCA), a federal reporting law. The agreement allows financial information to be directly reported to U.S. tax and banking authorities, primarily targeting U.S. citizens and residents who may have financial assets in Vatican City (and are not reporting them as is required).
Archbishop Paul R. Gallagher, undersecretary for relations with states, signed the agreement on behalf of the Vatican. “As Pope Francis frequently reminds us, evading just taxes is stealing both from the state and from the poor,” Gallagher said at the signing ceremony. “Every person has, in fact, the duty to contribute, in charity and justice, to the common good, according to his own abilities and the needs of others, by promoting and assisting the public institutions dedicated to bettering the conditions of human life.”
Tax Havens
Despite Vatican City having previously been regarded as something of a tax haven, Francis publicly denounced them during his papacy. He wasn’t alone—increasingly, leaders of countries and organizations, including the Organisation for Economic Co-operation and Development (OECD) have spoken out against tax havens.
According to a 2019 International Monetary Fund report, tax havens collectively cost governments $500-$600 billion annually in lost corporate tax revenue “through legal and not-so-legal means.” That includes U.S. taxpayers. American Fortune 500 companies held more than $2.6 trillion of those profits offshore in 2017 (29 of these corporations paid an income tax rate of 10% or less in countries where these profits are officially held). That number has since dropped thanks to a mandatory repatriation tax, or MRT, under the Tax Cuts and Jobs Act (TCJA)—a provision found to be constitutional in Moore v. U.S.
The use of tax havens isn’t limited to U.S. companies—the Vatican used them, too, raising issues about the ethics of such behavior. In 2021, Francis issued new anti-corruption regulations that require Vatican cardinals and managers to regularly declare they are investing in funds consistent with Catholic doctrine and aren’t stashing money in tax havens. Francis also emphasized the importance of transparency in the management of public funds. Vatican superiors, wrote Francis, “have the particular responsibility of making concrete the fidelity of which the Gospel speaks, acting according to principles of transparency and the absence of any conflicts of interest.”
Tax Collection
While we may like to demonize the IRS and other tax collectors in the U.S., Francis suggested, “The taxman, when he or she is just, promotes the common good.” However, Francis noted that it was important to be impartial when collecting taxes and affirm that “no citizens are better based on their social class, but that everyone is entrusted in good faith to be faithful builders of society.”
Francis also cited transparency as crucial to collections and spending, suggesting it leads to greater compliance. “Transparency in the management of money, which comes from the sacrifices of many workers, reveals freedom of spirit, and teaches people to be more motivated in paying their taxes,” he said.
That sentiment is shared by many in the U.S.—our income tax system is built on the idea of voluntary compliance, which the IRS calls “vitally important for the nation.” In the U.S. system, taxpayers are responsible for declaring their income, calculating their tax liability, and filing a tax return on time. A 2024 IRS report found that the tax years 2021 and 2022 translated to about 85% of taxes paid voluntarily and on time, consistent with recent levels.
Reactions
The Tax Justice Network (TJN), a UK-based organization formally established in 2003 as a network of engaged activists and experts, called Francis “a global ally of tax justice.” In a statement to Forbes, TJN noted that one of Francis’ final public acts before he was admitted to the hospital in February was to have been a message for the High Level Dialogue on Tax Justice and Solidarity hosted by the Vatican. At the event, the Pontifical Academy of Social Sciences and the Independent Commission for the Reform of International Corporate Taxation (ICRICT) convened a global conversation on the threats of cross-border tax abuse by multinational companies and wealthy individuals.
The organization said Francis was “someone whose gaze turned first to those most marginalised in society, and whose voice spoke for those who had no voice.”
Read the full article here