Mirror of Justice

A blog dedicated to the development of Catholic legal theory.
Affiliated with the Program on Church, State & Society at Notre Dame Law School.

Wednesday, February 16, 2011

A good Catholic cannot rule out tax increases in today's fiscal climate. Discuss.

OK, so forgive my deliberately provocative headline, but in both Washington D.C. and my local state capitol (St. Paul), the battle lines have been drawn (once again) surrounding the annual budget debates.  The lines seem, if anything, to be more calcified than ever between the "no tax increase" and the "no significant spending cut" crowds.  I find plenty to quibble with in both camps, but I confess to finding the first camp more infuriating.  When the preferred option is drastic cuts to programs that serve as lifelines to the most vulnerable among us (e.g. Head Start, prenatal health programs, etc.) -- particularly when those cuts appear to be a desperate attempt to reach a symbolic $100 billion campaign pledge -- I find the refusal to contemplate any increased taxes to be maddening.  I know I've raised this before, but I still find any of three potential grounds for a "no new taxes ever!" approach to be problematic: 1) if a categorical opposition to increased taxes is based on a belief that they don't work to the extent that they'll depress levels of economic activity and thus actually reduce revenue, it seems that there would need to be more persuasive evidence to bolster that belief.  2) If opposition is based on the belief that the government is misusing the money and spending it imprudently, then logically the opposition would target specific programs rather than cap revenue in a way that hinders prudent and imprudent spending alike.  3) If the opposition is based on a more principled stance along the lines of "It's the people's money!," that's a viable position, though it seems to stand in some tension with Church teaching.  (See, e.g., Compendium para. 355 (discussing "payment of taxes as part of the duty of solidarity.")

I generally find Paul Krugman to be insufferable, but his op-ed from a few days ago was difficult to ignore.  Just as some on the left seem to pay no heed to the dangers of an ever-expanding profligate state, the alternative approach emerging from the awkward GOP/Tea Party marriage appears to be equally reckless.  A person who takes Catholic social teaching seriously needs to reject both camps, doesn't she?  Putting it more concretely -- and yes, I know this is usually consigned to the province of prudential judgment -- in our current fiscal circumstances, can a Catholic who accepts Church teaching on the role of the state in providing a safety net for the vulnerable prudently reject the very possibility of tax increases? 


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And neither can a good Catholic rule out tax cuts.

Posted by: Rob | Feb 16, 2011 10:47:28 AM

Since $100 Billion is still far less than is needed in this debt crisis, and yet is an important substantial step, it is hardly "symbolic."

Posted by: Matt Bowman | Feb 16, 2011 10:49:10 AM

Matt, maybe "symbolic" is the wrong word. What I'm trying to get at is the notion that "we don't care what is cut, just cut a lot!" is a rhetorical tool when it's not part of a serious conversation about how to navigate the relationship between fiscal viability and real human needs. A Catholic always has to care about what is being cut, don't they? Few people on either side of the aisle wants to do the hard work of addressing entitlement programs, and in that context, "I promise to cut $100 billion" strikes me as irresponsible because it seeks to place the burden of our commitment to smaller government on those whose interestes are less politically untouchable.

Posted by: Rob Vischer | Feb 16, 2011 11:11:32 AM

Rob, I appreciate the provocative question. A few thoughts: First, we agree on what I imagine is the easy starting-point, namely, that the "taxation is theft" mantra is not consistent with the Catholic understanding of political life and responsibility. In a just political community -- the kind of political community that we should support -- public spending will be necessary, and that money will need to come from taxes. That said, my view is that the tradition tells us almost nothing about the mechanisms that must or should be employed for raising that money. Enough needs to be raised to do what a just political community, under the circumstances, should do. The money-raising tax mechanism should be that method, or combination of methods, that most efficiently and fairly raises the money that is needed (neither more nor less). More than that need not be raised. And, indeed, it would be unjust for a political community to take more from families and non-state entities than is needed to do what the political community needs, in justice, to do.

At our present moment, I don't think we can say with any certainty (and certainly not with any religious authority) that "support for tax increases" is morally required. In saying this, I am working from the premise (which I think is solid) that, at present, we (that is, our various political communities) are spending more than they should, on things that, in justice, they need not be funding.

I see no tension between saying "it's the people's money!" and "payment of taxes is part of the duty of solidarity." The duty of solidarity is precisely to *part with* some of "the people's money", but that doesn't mean that the money isn't, as an initial matter, the people's. What is truly insidious is the rhetoric of taxing-and-spending that frames the question in terms more along the lines of "all money belongs to the public authority, which then decides how much it can afford to let people use themselves."

Posted by: Rick Garnett | Feb 16, 2011 11:13:57 AM

Well articulated and thought out post. As a local myself, you perfectly describe the conflicts that've been brought up in this current political climate.

Posted by: Church Supplies | Feb 16, 2011 11:30:51 AM

"in that context, "I promise to cut $100 billion" strikes me as irresponsible because it seeks to place the burden of our commitment to smaller government on those whose interestes are less politically untouchable"

Well, unless there is a drastic need to cut more.

"A Catholic always has to care about what is being cut,"

Just because somebody cuts something, and even promises to cut up to a needed level, doesn't mean they don't care about the cut.

Posted by: Matt Bowman | Feb 16, 2011 11:32:02 AM

What is most disturbing from a Catholic point of view is that there are different kinds of taxes and different kinds of spending. In our political rhetoric, “tax cuts” almost always refer the progressive income tax and rarely to the regressive payroll tax (ask a supporter of flat taxes if s/he supports it for the payroll tax and marvel at the response). And notice how demands for “spending cuts” usually exempt spending on advantaged and politically popular groups where the money really is (farm subsidies, Medicare, Social Security, Defense, etc.) in favor of programs that benefit the poor and marginalized.

The effect of all this is that the most vulnerable members of our society are on the wrong end of both sides of the equation, while the most advantaged win on both sides. Comfort the comfortable and afflict the afflicted is the consistent result. It also explains why the spending cuts never amount to enough to make up for the tax cuts (it turns out we just don’t spend that much on poor people), and why you can have the spectacle of well-off white people getting Medicare, Social Security, students loans, or farm subsidies attending rallies where they decry “socialism” and “out of control big spending” on those programs that just happen to be those associated with poor people of color.

From the perspective of Catholic social teaching, I think it is important when listening to these tax and spending debates to focus first and foremost on whose interests are being advanced and whose are being ignored or harmed. Rather than a preferential option for the poor, too often we see the opposite.

Posted by: Dave Cochran | Feb 16, 2011 11:56:39 AM

You would probably consider me one of those "equally reckless" Catholics who is a member of the GOP/Tea Party marriage, but I think, at a very fundamental level, you misunderstand the conservative position. For example, not only do I not reject the possibility of tax increases, I think it's imperative that we increase taxes, and post haste. It's just that, as a conservative, I believe the most effective way to increase tax revenues is to lower tax rates.

Posted by: Mark | Feb 16, 2011 12:58:44 PM

On the heels of this discussion comes another interesting one, related to regulations using the police powers of the state - http://www.star-telegram.com/2011/02/14/2848247/hottot-texas-regulators-unnecessarily.html.

One of the interesting quotes: "The state agency relied on the pernicious notion -- embraced by a disappointing number of judges -- that the government need not demonstrate a link between the regulations it imposes on businesses and the supposed purposes of those regulations. Thus, the agency's lawyers argued that simply because eyebrow threading could (they claimed, but did not prove) conceivably raise health and safety concerns, it did not matter that a doctor testified there are no real concerns, nor that the regulations do nothing to address its supposed safety concerns."

A warming topic of discussion recently has been the increase of regulations of professions that seemingly pose no danger (or no more than any work) of injury or threat to health, such as the aforementioned eyebrow threading. What happens is that the barriers to entry are increased, which makes many professions the province of the well-connected and better off, and makes entry more difficult for the poor, despite any motivation.

As Catholics, we might recognize that some barriers exist naturally, and others for good reason (making ammunition for sale, for instance, might be regulated, as brain surgery, perhaps law, definitely transportation of dangerous chemicals). In other industries, however (hair cutting, eyebrow threading, etc), such regulations do not serve a compelling public interest, and (though I generally loathe such analysis), seem only to serve to prevent competition from interested individuals in those fields. (See the Benedictine casket monks in Louisiana, for instance.)

It seems to me that a Catholic analysis of the power of the state in such a situation would have to partake of subsidiarity and police powers of the state to see whether such a "tax" (for licensing often requires expensive schooling or fee payments) is warranted by the profession in question. If licensing is warranted, could it be imposed in such a way so as to lower barriers but protect safety - for instance, rather than schooling and license for a barber, rather than certain procedures and equipment must be purchased.

Posted by: Jonathan | Feb 16, 2011 1:01:22 PM

$100 billion more or less is symbolic. People who whine about the politicians downplay the fact that in many ways voters in this country have pretty much gotten what they asked for: two santa clauses, high entitlement spending and lowered taxes.

$100 billion is symbolic because it leaves unaddressed the reform of social security and other entitlement programs...these are the real cost drivers.

Let me ask this though, Rob--isn't it contrary to Catholic teaching to completely rule out substantial spending cuts? Is it not greedy for public employee unions to crow about--oh, the horror--that their members would have to take a cut in pensions that range around 75%? Is it not greedy for one generation to demand the same entitlements in old age from progressively shrinking younger generations when life expectancy increases?

Posted by: Don Altobello | Feb 16, 2011 6:52:54 PM

"For example, not only do I not reject the possibility of tax increases, I think it's imperative that we increase taxes, and post haste. It's just that, as a conservative, I believe the most effective way to increase tax revenues is to lower tax rates."

True enough if you are also talking about some broadening of the base (i.e., reducing some of the special breaks and making the taxable base not pick winners/losers). That said, the supply-side argument only goes so far, and at some point, you cannot just hope to perpetually grow GDP and hope revenue intake does the same.

Posted by: Don Altobello | Feb 16, 2011 6:56:35 PM

Don Altobello -- I do agree with the need for substantial spending cuts. I think both cuts and tax increases are the only way out of the current fiscal debacle.

Posted by: Rob Vischer | Feb 16, 2011 9:51:35 PM

Given that the economic inequality in American today equals that during the period just before the Great Depression, and that America, by far the richest country in the world, also contains a more unequal distribution of wealth than, say, Egypt, I'm wondering what the Catholic response to this should be. The middle class is fast disappearing, and spending cuts have little to offer here. Why not increase the number of tax brackets, so that somebody making 5 million doesn't pay the same percentage that somebody making 250,000 does? Why not lower all taxes on earners making, say, less that 400,000 per annum and raise taxes on those making more than 2 million per annum to post World War II rates? Suppose that we *do* have slower growth as a result--just for the sake of the argument--is this necessarily a bad thing, if we still have growth, and if that growth is more equally distributed across all sectors of the society?

Posted by: WJ | Feb 17, 2011 10:06:56 AM

The University of Maryland just released a study in which ordinary Americans did better than Congress at reducing the budget deficit because they were willing to use a combination of spending cuts (primarily to defense) AND tax increases. I think that the way in which a majority of these Americans would cut spending and raise taxes, aligns more closely to Catholic Social Teachings than the proposal currently being floated in the U.S. House of Representatives. The study involved 800 Americans who reflected the make-up of the American population.

The study also compared how well people who identified themselves as Independents, Democrats, and Republicans did. The Independents did the best at reducing the deficit while the Republicans did the worst.

For a summary of the study and a link to the full report, see http://newsdesk.umd.edu/vibrant/release.cfm?ArticleID=2335

Posted by: Elizabeth Brown | Feb 17, 2011 11:05:35 AM

Well, it all depends on how much of the Federal budget actually involves serving the common good, as opposed to rent seeking and other common bads (eg Planned Parenthood funding). If say the entire Federal budget serves the common good, and not particular interests, then by all means, the good Catholic should consider tax increases and budget cuts as a proper prudential measure. However, if say half the Federal budget actually involves the serving of particular interests at the expense of the common good, then the good Catholic should consider both tax and budget cuts as a proper prudential measure.

So before we put the cart before the horse, it would seem that Catholics would do well in determining what in the Federal budget actually serves the common good, and what does not. Then, and only then, can we answer the question of whether revenues and outlays should be increased or decreased in a particular combination.

At least that seems what would be required under a proper understanding of Catholic Social Teaching. (My guess is that the budget has a substantial amount of rent seeking provisions in it, such that both budget cuts and tax cuts are prudentially warranted, with much greater budget cuts than tax cuts.)

Posted by: CK | Feb 17, 2011 5:41:16 PM

I think a Catholic could, consistent with CST, categorically oppose a tax hike at this time and place in America, for these prudential reasons:

1. We have good reason to be skeptical that an extra dollar will go to the poor rather than those with better lobbyists. If Obama, once the great left hope, is willing to cut school lunches, but defends NPR funding, where are we?

2. We have good reason to be skeptical that even money spent on the safety net is actually helping the poor. That is so at multiple levels: whether the money is spent on red tape vs. benefits, and whether benefits help or harm the recipients if not coupled with other changes, etc.

3. We have good reason to be skeptical that increased taxes will fall on the rich rather than the poor and middle. This is not just a matter of political choices to raise rates on the rich versus the poor, etc. It is a matter of tax incidence, and which taxes, such as "corporate" ones, get passed on to customers buying products, etc. Further, taxes on capitalist shareholders are not just on fatcats; taxes on capital are passed to pension funds, a source of much income for non-rich retirees and so on. All of that is open to battles of experts.

Surely no one doubts that CST, by approving both the duty to pay taxes and the duty to provide a safety net, would support tax increases for King John to build castles. Surely at some point CST prefers exclusively private charity to pouring money down the toilet of a failed State. The only question is whether the US federal government, 2011, is there yet. I say yes. You may disagree, but I see nothing about CST that forces me to close my eyes to contrary evidence.

Posted by: Catholic budget cutter | Feb 18, 2011 12:06:38 PM

I was glad to see that a number of the leaders of the Tea Party were willing to make cuts in the military budget. If you want to know how CST relates to this issue of budget cuts, I believe this is the place that you should look. As Andrew J. Bacevich said, "The essential facts remain: U.S. military outlays today equal that of every other nation on the planet combined, a situation without precedent in modern history. The Pentagon presently spends more in constant dollars than it did at any time during the Cold War — this despite the absence of anything remotely approximating what national security experts like to call a “peer competitor."" And, we might recall that back in the Cold War, Vatican II in Gaudium et Spes, called the arms race the "curse of the poor," because resources that were diverted there that could be used to address extreme poverty around the world. JPII had much to say about this issue also. In one speech, he said, "The needs of the poor take priority over the desires of the rich; the rights of workers over the maximization of profits; the preservation of the environment over uncontrolled industrial expansion; production to meet social needs over production for military purposes." Benedict in his World Day of Peace Letter in 2009 Fighting Poverty to Build Peace cites gross military expenditures around the world as one of the primary causes of poverty (and so a lack of peace): the “immense military expenditure, involving material and human resources and arms, is in fact diverted from development projects for peoples, especially the poorest who are most in need of aid." Who are the greatest culprits here? Clearly it is far and away us. Shouldn't we begin by cutting this overblown budget to help out the poor in our own country?

Posted by: Charles McCarthy | Feb 18, 2011 4:10:59 PM

I need the perfect gift for my father-in-law. I think this will do just the trick for our first Christmas together.

Posted by: EmmaCay | Dec 21, 2011 3:27:32 PM