Has The Catholic Church Gone Too Far?

During the last Presidential campaign G. W. Bush intimated to the Pope that he interject religion into American politics. Significantly Archbishops in the U.S. became vocal about Kerry's evilness, because he was representing secular interests over religious Catholic ones, and advised their congregations not to vote for "evil", that do do so would make them culpable of a sin.
I can remember clearly the debate that went on about John F. Kennedy being a Catholic when he ran for President and his promise to the public that he would not let his religion interfer and dominate his civil duties, that his religion impacted only his personal moral actions.
In interjecting itself into American politics the Catholic Church has broken a trust by engaging in coercion and intimidation in order to influence a political process. The Church should be reminded that it was once a minor, and dispised, religion in the United States and only due to liberal tolerance and a belief in the separation of State and Religion, allowed to florish to the extent it has.
Most christians do not realize the power that the Church holds over its members: such as "fear" appeals; the fear of purgatory, withdrawal of Holy Communion, excommunication, and maybe even a return of "extermination of heretics" and the inquisition.
Some may pooh-pooh the extreme cases just mentioned above but think for a moment; if the Church is willing to take one extreme step it has always been case that it was willing to take even more stringent steps.
The danger lies in what has just transpired--nothing. No one of note has spoken out in diplomatic protest (our present administration is a party to the guilt of encouraging interference, the public has been lulled into a zombiatic state, thanks to very effective propaganda, and the media is out there in Never-Never Land obsessing about Michael Jackson and hurricanes.
What to do about it?
One answer is to remove the non-profit status on Church owned commercial land (maybe on all); for Church lands are tax-exempt and businesses run by churches are tax-exempt, which gives them an advantage in a "Free-Market". Why should a church be able to compete with private business while it is engaging in Faith-based politics? Religion engaging in politics impinges on First Amendment rights--or it should if it doesn't, legally.
People expect in a democracy to be able to follow and vote their own conscience and not be coerced or intimidated by religion.
What voters should do is not vote for Catholics in the first place just to be sure we keep a separation of State and Religion.
If voters don't want to go to such an extreme voters should tell the Church to butt out and mind their pews.
Bishops who threaten sanctions against U.S. Legislators should be considered agents of a foreign hostile power and sent packing back to the Vatican.