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They provide little levy which isn't as strong as feudal levies. That makes it likely that you benefit more from increased income that can be used to upgrade castles and pay for retinues (and emergency mercenaries if you need them)
As far as priorities, I prioritize maxing out feudal levies then I prioritize city then church taxes. Tribal just gets the leftovers.
And I do put the slider towards taxes quite a lot just not all the way.
Also their troops don't has a good of a spread of types that feudal does but also do have decent troops, so It's usually fine unless you absolutely NEED bodies to meet a siege target.
republics and feudal are generally the only goes i go extremes on since they absolutely suck at one while being great at the other.
Now as catholic, I'd probably go levy based to keep as much ducats within the realm as possible for upgrading holdings, since if they pay low/no taxes they pay the pope low/no taxes. And if they do happen to like me more, well that's some extra troops for me.