By Alan F.H. Wisdom (@afhwisdom)
“The issue of the time is how much [economic] inequality is tolerable.” So declared the Rev. Christian Iosso, Coordinator of the Presbyterian Church (U.S.A.) Advisory Committee on Social Witness Policy (ACSWP), at the conclusion of a workshop on “Raising Taxes and Raising Crops.” The workshop, part of the April 5 “Food Justice” conference, was also billed as a report from an ACSWP team commissioned by the 2012 PCUSA General Assembly to study the U.S. tax system.
Iosso’s take on the issue was that, at minimum, current levels of inequality were intolerable. “We’re all experiencing, like the frog in the hot pot, this crazy imbalance of where the money is going in society,” he asserted. “The culture of greed has gone too far.”
The ACSWP coordinator was grim about the state of the U.S. economy and society. “We see the young who have no clear career paths open anymore,” he said. “In a society where there’s no hope of economic mobility for many people, then there becomes a lot of corruption, a lot of cheating.”
In the face of such economic and moral crises, the solution favored throughout the workshop was to raise taxes on the rich. To make this argument, Iosso introduced Dr. Edith Rasell, an economist who holds the position of Minister for Economic Justice in the United Church of Christ (UCC). Rasell, who is also a member of the PCUSA team studying tax policy, asked and answered the question, “Why is progressivity [higher tax rates on higher incomes] better?”
Rasell remarked that “we all owe to society” for the “social capital”—infrastructure, knowledge, patterns of cooperative action—that has been built up over the generations. Those who “have a lot of money” have benefited more and therefore “can afford to pay more.” Her assumption was that government was the main source of this social capital, and paying taxes to the government was the main way to settle the debt that “we all owe to society.” The UCC economist saw government as entitled not only to extract a proportionate share of everyone’s income, but also to impose higher tax rates on the wealthy to redistribute their income to others.
“The federal income tax, despite all its flaws, is the most progressive tax we have,” Rasell stressed, “and never let it be done away with.” Iosso suggested that the income tax could be made still more progressive by going after funds that the wealthy had stashed in overseas accounts. “What if the tax haven stuff reveals that the [top] one percent really do have a spectacular amount that they’re tapped into?” he asked. “Then taxing them more adequately really does yield a surprising amount.”
Rasell handed out and shared snippets from a paper she had written for the UCC on “The Tax System: A Matter of Faith, Fairness, and Flourishing Communities.” In the paper she locates the “theological and biblical foundations” of modern fiscal policy in various scriptural admonitions addressed to the early Church: the Great Commandment to “love your neighbor as yourself” (Matt. 22:39); Jesus’ warning that all will be judged by how they treat the stranger in need (Matt. 25:31-46); and Paul’s appeal to the Corinthian Christians to send relief to their impoverished brethren in Jerusalem (2 Cor. 8:1-15).
“We are called to generosity and we need not fear scarcity,” Rasell states in the paper. She sees this theological principle embodied in today’s welfare state: “In a modern society caring and sharing occur in many ways including, very importantly, through a system of progressive taxation that pays for a social safety net, the universal provision of public services, and opportunities for all.” In the UCC official’s view, apparently, paying taxes counts as “generosity” and government entitlement programs are the fulfillment of the command to love one’s neighbor. She refuses to acknowledge any “scarcity” that might limit the scope of taxes that the government collects or benefits that it dispenses.
Rasell looks to the state to solve almost all social problems: “In a nation of 310 million people and a world of over six billion, only government—of, for, and by the people—has the potential to raise sufficient resources and put in place the structures and institutions that can fill our unmet needs and provide for the common good.” Since the needs are great, she insists: “More revenue is needed; taxes must be raised.”
Rasell’s paper proposes to levy heavier taxes on capital gains, carried interest, estates of the deceased, and corporate profits. She backs a new tax on financial transactions and wants to recapture revenue now lost through tax deductions and credits. Nowhere does Rasell suggest any moves to lighten the burden of taxation. She never addresses the possibility that taxes might at some point become excessive, strangling economic initiative. The prophet Samuel warned the Israelites against a king who would “take one-tenth of your grain and of your vineyards and give it to his officers and courtiers” (1 Sam. 8:15). But in Rasell’s thinking there seems to be no upper limit to the share of wealth that the government can claim for itself.
If this is the direction in which the PCUSA tax policy study is pointed, it appeared to enjoy the enthusiastic support of the Presbyterian activists attending the April 5 workshop. When Rasell polled the roughly 20 audience members about whether they regarded their taxes as too high, too low, or about right, almost all responded that their taxes were too low and should be raised. The UCC official expressed surprise at this response, noting that other church audiences might have taken a different view on taxes.