Criticism has trailed the recent White House proposal for cuts in corporate and personal income tax rates, but few have been as direct as Jesuit Father Fred Kammer’s assessment. “The whole thing is basically—what can I call it?—a scam to pay back wealthy donors with more tax breaks,” he says. The plan has been promoted by the White House as a reform meant to simplify the tax code and lower the burden on working and middle-class taxpayers.
Father Kammer is convinced the measures proposed by the president will not achieve the advertised outcome. Analysts at the Tax Policy Center, a joint project of the Brookings Institution and the Urban Institute, agree, refusing even to refer to the Trump plan as a tax reform, but just a new round of tax breaks.
Referring to the center’s analysis, Father Kammer points out that the lion’s share of the tax relief offered by the plan will be consumed by the nation’s top 1 percent—the same folks who have already enjoyed previous and substantial rounds of tax reductions under the Reagan and Bush administrations. Those cuts had been similarly promoted as tax “reforms” aimed at the middle class.
The lion’s share of the tax relief offered by the Trump plan will be consumed by the nation’s top 1 percent.
According to Catholic social tradition, paying taxes, like voting and other forms of civic participation, is part of the way Catholic citizens contribute to the common good. Father Kammer says the clearest statement of Catholic thought on a morally sound tax system can be found in the U.S. bishops’ pastoral letter “Economic Justice for All,” published in 1986.
The bishops urged then that the tax system “should be continually evaluated in terms of its impact on the poor” and should be based on three criteria: those below the poverty line should pay no taxes at all, burdened enough by the costs of basic needs; the system should raise revenue adequate to pay for the public needs of society, especially to meet the basic needs of the poor; and, with an eye on reducing inequalities of income and wealth in the nation, it should be structured according to the principle of progressivity, so that those with relatively greater financial resources pay a higher rate of taxation.
Though many details still remain to be ironed out, the president’s proposed framework for “fixing our broken tax code” does not appear to satisfy the bishop’s requirements for a morally defensible system.
“In an era of rising populism, the [proposed] tax framework is a major tax cut for businesses and the very highest income Americans and only a small tax cut for middle-income households,” an analyst for the Tax Policy Center reports. “Seeking to balance the demands of their dueling business and working class constituencies, President Trump and the congressional Republican leadership have tilted heavily towards traditional GOP business interests.”
The framework proposed by the Trump administration is “sure not for the well being of the country,” Father Kammer says, and “certainly not to help working families and poor families.”
The proposed new tax policy cuts the corporate tax rate from 35 to 20 percent. It eliminates the estate tax and significantly rearranges the individual income tax rate structure, reducing top bracket percentages and the number of income brackets from seven to three: 12, 25 and 35 percent. The plan nearly doubles the standard deduction, to $12,000 for individuals and $24,000 for joint filers, but ends personal exemptions and simplifies tax filing be eliminating individual deductions and various loopholes primarily used by higher-income taxpayers. It includes an increase in the child tax credit.
Under President Trump’s current proposal, in 2018 middle-income earners can expect a break of about $660 annually—1.2 percent of their after-tax income, according to the Tax Policy Center. “By contrast,” the center reports, “it would boost the after-tax incomes of the highest-income 1 percent by an average of $130,000, or more than 8 percent. The top 0.1 percent would get an average boost in after-tax income of $720,000 or 10.2 percent of their after-tax income.”
According to the center, the nation’s top 1 percent (those making $730,000 or more) would receive 50 percent of all the plan’s tax cuts while middle-income households (those making between $50,000 and $90,000) would get about 8 percent of the total benefit. Worse news for middle-class payers is delayed about 10 years, when the overall tax burden bumps up for most taxpayers. That is because the plan replaces personal exemptions, which are indexed for inflation, with additional credits for children and non-child dependents that are not indexed for inflation.
Worse news for middle-class payers is delayed about 10 years, when the overall tax burden bumps up for most taxpayers.
By 2027, the center reports that a quarter of taxpayers, including nearly 30 percent of those with incomes between $50,000 and $150,000 and 60 percent of those making between $150,000 and $300,000, would actually pay more than they would if current tax policies were maintained. About 80 percent of the continuing tax relief in 10 years under the Trump plan would accrue among taxpayers in the top 1 percent.
The Tax Policy Center reports that the Trump administration proposal will reduce federal tax revenue as much as $2.4 trillion over the next 10 years. Father Kammer worries about what that shortfall will mean to the second of the bishops’ criteria for a just system. Will government, especially if it finally seeks to make more progress toward universal health care, have the resources necessary to ensure the common good? Or will revenue gaps mean deeper cuts in social spending that will harm the society’s most vulnerable members?
Father Kammer wryly notes that former budget hawks in the Republican Party have abruptly gone silent on pledges that tax relief would be revenue neutral. And traditional GOP anxieties about increasing the deficit and federal debt appear to have vanished now that a Republican president is proposing revenue-threatening tax breaks.
Of course, the Trump administration does not see it that way, arguing that its tax cuts will spur enough economic growth to prevent revenue losses. This has become a fixed notion among supporters of supply-side economics, despite little evidence that the calculus has ever worked. Bruce Bartlett, a domestic policy adviser to President Ronald Reagan, argues that one would be hard-pressed to demonstrate a definitive connection between tax cuts for the wealthy and economic growth. Though the co-author of the 1986 Reagan plan cutting taxes and reducing the number of brackets for individual filers, he now describes the notion of growth-producing tax cuts as the “Republican tax myth.”
The U.S. Conference of Catholic Bishops has so far not directly commented on the president’s tax plan, but in recent months the conference has been deeply critical of administration budget proposals that have continued a preferential option for military spending while threatening substantial cuts in health, education, housing and other services for poor and vulnerable Americans.
Criticizing proposed cuts in discretionary social spending in the 2018 budget in a letter to the Senate on August 31, the conference’s administrative committee wrote: “Such deep cuts would harm people facing dire circumstances and would place the environment and natural resources at risk. When the impact of other potential legislative proposals, including the proposed reduction of spending on health care by hundreds of billions of dollars over the next decade and implementation of tax policies that would offer trillions of dollars in tax cuts to the wealthy over the same period are considered, the prospects for vulnerable people become even bleaker.”
“Wave after wave of tax cuts since the 1980s have disproportionately benefited the wealthy far beyond the amount of taxes they pay, while offering token cuts to lower brackets.”
And in July Bishop Frank J. Dewane of Venice, Fla., chair of the U.S. Bishops’ Committee on Domestic Justice and Human Development, expressed concern over a U.S. House of Representatives budget resolution. “A nation’s budget is a moral document,” he said in a prepared statement. “Reducing deficits through cuts for human needs—while simultaneously attempting a tax cut, as this proposal does—will place millions of poor and vulnerable people in real jeopardy. Congress should choose a better path, one that honors those struggling in our country.”
A spokesperson for a Catholic economic think tank, the Acton Institute, which is more favorable toward market-based solutions to social inequities and challenges, could not provide a response to the latest Trump proposal by publication time. But its founder and president, Father Robert Sirico, in an interview with the National Catholic Register in July, found much that he liked in the initial outline of the plan. “A refundable tax credit, instead of a direct subsidy from the government, is more in line with the principle of subsidiarity,” he said.
“When the parents work outside the home and they purchase childcare, I think they can derive some benefit without it being directly a subsidy from the government,” he added. Father Sirico worried that “our current tax policy doesn’t give couples incentives to get married or stay married,” arguing that intact families led by couples in stable marriages remain the best anti-poverty program possible.
Though it is considered near anathema in U.S. politics, Catholic social teaching has always endorsed the role of wealth redistribution via tax policy.
But Vincent Miller, Gudorf Chair in Catholic Theology and Culture at the University of Dayton in Ohio, is concerned the president’s plan will exacerbate inequities in the tax system while laying the foundation for a kind of intergenerational injustice, forcing greater deficit spending now and passing the tab to future generations.
Previous tax cuts, he says, produced “spikes of inequality.”
“The argument has been that the wealthiest pay more taxes, so they get a higher percentage of the cuts,” he says, “but they don’t pay 80 percent of the taxes”—the percentage of the tax break the top .01 percent will enjoy—“they pay about 40 percent.”
In an email, Mr. Miller writes: “Wave after wave of tax cuts since the 1980s have disproportionately benefited the wealthy far beyond the amount of taxes they pay, while offering token cuts to lower brackets.
“The result has been a systematic shifting of the tax burden downward, and through deficit spending forward onto our children. These policies have contributed directly to the explosion of income inequality during the same period.”
He says, “The tax cut being proposed now continues that practice,” adding, “It is hard to read this proposal as a serious attempt to fund the government to serve the common good.”
Though it is considered near anathema in U.S. politics, says Mr. Miller, Catholic social teaching has always endorsed the role of wealth redistribution via tax policy. In St. John XXIII’s “Mater et Magistra,” Mr. Miller says, “The church explicitly embraces the progressive tax”: “In a system of taxation based on justice and equity it is fundamental that the burdens be proportioned to the capacity of the people contributing” (132).
The social ethics of the Trump tax proposals aside, Mr. Miller wonders about the present urgency of new cuts after a long period of excessive federal fiscal and monetary stimulation and while the economy continues to perform reasonably well. With unemployment low and growth up, it may be a better time, he argues, to reduce deficit spending and pay down some of the national debt, not create more of it via a tax break.
Of all the proposed tax cuts the one that is most unjust is the elimination of the estate tax. The super wealthy have an obligation to return to the country some of the wealth they accumulated simply because it was the labor, infrastructure, and natural resources of the country that allowed them to accumulate such wealth. It is not a confiscatory tax that takes away all of its heirs' wealth as too many would have us believe. It is simply a tax that recognizes the debt the wealthy owe to the country that allowed their genius to flourish.
Kudos by the way to taxpayers like Bill Gates and Warren Buffet for recognizing this principle without being forced to contribute.
Alfred
I urge you to check on what both Mr Gates and Mr Buffet have publically admitted they have set up to avoid the estate tax.
In particular you will find that Mr Buffet is channeling most of his estate through the Gates Foundation. When asked how he could take that position in light of his public statements in favor of higher taxes in general, Mr. Buffet replied that he thought that the Gates Foundation knew better how to spend the money than the Federal Government!! The Federal Government is not going to collect any significant taxes from your two heroes.
I also note that while Catholic Social Justice principles may endorse "wealth distribution via tax policy" , the Church and its various controlled entities such as universities vigorously defend their own tax exemptions. The potential loss of the income tax deduction for charitable contributions has also met wide spread ecclesiastical opposition. Go Figure!
“Mr. Buffet replied…the Gates Foundation knew better how to spend the money than the Federal Government!!”
Stuart, after ten years of the Trump tax cuts, almost 80 percent of the benefits would go to the top 1 percent. Buffet perhaps sees merit in helping the Gates Foundation instead of the top 1 percent.
Gates and Buffet both support a minimum thirty percent income tax on the top .01% incomes.
Chuck
I like a flat 30% tax rate on the top 1%....rain hail or shine. But that idea does not excuse the fact that Buffet and Gates ...The go to standard bearers cited by higher tax social justice warriors ......both are practicing a "do as I say not as I do " when it comes to the death tax and other taxes as well.
Further the Tax Policy Institute , relied on for this article, admits that they made their analysis based on conjecture as to what the Tax bill MIGHT contain. It is already clear that the bill's terms are anything but settled ....see Wall Street Journal October 6,2017
Stuart, higher estate and income taxes on the top .01 percent could support increasing the current six percent of federal spending on education. Buffet perhaps would then consider paying the estate tax. More than a third of the Gates Foundation spending since 2008 has focused on education.
Chuck
So we have to bait a good liberal democrat like Mr Buffet into doing what he insists the rest of us should do?
Stuart, what is it that Mr. Buffet insists the rest of us do?
Chuck...
Pay more taxes while he shelters his own income from tax.
Would Mr. Buffet pay the tax rate you want under Trump's tax plan?
Chuck
I have no idea because the existence of a fourth rate for the top earners is not yet determined. But perhaps you could delve into your book of statistics to find out how it's is that 7 0f the 8 richest people in the world ...who control an estimated 50% of its total wealth are all American Democrats or a Mexican noted for his contributions to Democrats?......strikes me as a bit odd you constantly rail against the Republicans when your target .01% are all Democrats.
Stuart, are you suggesting a 70% top federal individual income and estate tax rate on the .01%? Targeting seven wealthy democrats perhaps would appeal to conservatives.
Chuck
Here you state our difference concisely:.....I don't believe in targeting anyone!.....you obviously do!
I am suggesting nothing other than that you wait to see the actual legislation before you go into your usual "Targeting Mode".
Mr Kotlarz,
Mr.Buffett could write a check to the US treasury at any time for any additional amount he deemed necessary but doesn't do so for the following Buffett Position on the tax-free foundations he established for his family members or contributes to via Bill Gates.
"In a 2007 CNBC interview, when asked why he shelters his money through tax-free strategies rather than writing big checks to Uncle Sam, Mr. Buffett responded: "I think that on balance the Gates Foundation, my daughter's foundation, my two sons' foundations will do a better job with lower administrative costs and better selection of beneficiaries than the government."
So Mr. Buffett thinks he and his family can put their money to better use than the government can. I guess he's really not so different from the rest of us who would rather direct our contributions to our own charitable institutions rather than passing them through high overhead government agencies. No doubt the Gates/Buffet 30%tax proposal would bypass Buffet as he. already pay less "income tax" than his secretary as he must claim a lower taxable income now.
Mr. Mosman, Buffet’s company, Berkshire Hathaway, wrote a $6 billion tax check to the federal government in 2012. Only seven other companies wrote a larger check that year.
Buffett paid $1.8 million in federal income taxes in 2015 on his $11.6 million in income. Buffet’s return showed a charitable deduction of $3 million, although Buffet gave over $2 billion to charity.
"Berkshire Hathaway, wrote a $6 billion tax check"
So what does the company tax bill have to do with Mr. Buffet's personal Federal Income tax which he proudly proclaims is the minimum? In fact as he pays less income tax than his secretary she must be very well paid. No doubt the charitable contributions are made to his various family and Gates' foundations.
Mr. Mosman, would restoring the top federal individual income and estate tax rates to seventy percent address your concern with Mr. Buffet’s taxes? The top individual income and estate tax rates ranged between 70% and 91% from 1947 through 1981.
Chuck
You keep changing the subject: This thread started because Mr Buffet and Mt Gates were cited as examples of people who didn't have to be asked to pay more taxes ...they volunteered. It was pointed out that both of these billionaires have repeatedly structured their own estates to avoid paying taxes with their own revealing comment that "they knew how to better spend the money and in a far more efficient manner than our Federal Government". This apparently raised your hackles because you think taxing and spending by the Federal Government is "the Answer" to every problem and here were two billionaire liberal icons contradicting you. Every issue you raised thereafter was tangentially nonsense or utterly irrelevant.
The issue is not what I think or Mr Mosman thinks.....the issue is what Mr Buffet ,self admitted tax hypocrite, thinks.. Finally if the Death tax were even 99% , it would make no difference to either Buffet or Gates because they both admit they have structured their billion Dollar estates to avoid ALL such taxes.....the rate is irrelevant.
Stuart, I believe Mr. Buffet, Mr. Gates, their foundations and a properly functioning government share a common vision about people. However, since 1982, repeated tax cuts for the .01%, have crippled government, blinded that vision and perniciously burdened the country with debt, as a share of GDP, at its highest level since WWII.
The Washington Post notes, “More than half of all state and federal spending on public assistance programs goes to working families…Let that sink in — American taxpayers are subsidizing people who work — most of them full-time (in some case more than full-time) because businesses do not pay a living wage.”
Part of General MacArthur’s 1948 New Year’s Day message perhaps would accurately describe America today, “…(Japan’s) past has permitted the major part of commerce…to be owned and controlled by a minority…and exploited to their exclusive benefit.”
Mr. Kotlarz,
Re: your comment "However, since 1982, repeated tax cuts for the .01%, have crippled government, blinded that vision and perniciously burdened the country with debt, as a share of GDP, at its highest level since WWII." Please see my earlier comment below. Since 1993, the changes in marginal tax rates, and tax take, on the entire top one percent of incomes have been consistent increases, not cuts as your comment, and the article, incorrectly state.
I am also puzzled that this article did not acknowledge that the current version of tax change proposals would do exactly what the bishops have suggested: shelter all income of those within the poverty threshold from income taxes. The proposed exemption of $12K for singles under age 65, and $24K for married couples under 65, corresponds to the 2017 federal poverty level of $12,060 for singles and correspond generously to the $16,240 poverty level for married couples (2-person household). I hope these few facts will be helpful to the conversation.
The average tax rate paid by the top 1% of incomes fell from 31% in 1982 to 22% in 2006. After the Bush tax cuts, the top 400 incomes paid 18% in 2010 on incomes averaging $265 million.
There is no compelling reason for the top 400 incomes to have paid 18% while the rest of the 1% paid 23% in 2010. Tax increases on individual, capital gains, corporate and estate rates should target the .01%. Although Obama modestly raised taxes in 2013, rates remain considerably lower than those of 1977.
While the 1% is mostly a tremendous gift for America, perhaps we need an entire generation. Growing a generation requires tax policy to reverse years of growing the .01% at the expense of 99.99%.
Mr. Kotlarz,
I'm having great difficulty reading this comment, as it jumps from considering the top 400, to the top one percent, to the top .01 percent, and from 1882 to 2006, to 2013, the relevance of which years I am unable to find. No source for the numbers, so forgive me. Here to help is a link to US Treasury tax data, and if you scroll down to Distribution data you will find the most recent tax year available, and who paid what in income taxes (which, of course, is not the total tax burden). Note the lower half of households pay Negative income tax. The top one percent pay actual rates higher than what you (I think) point to for some period of time I cannot discern. I hope this data is helpful. Peace. https://www.treasury.gov/resource-center/tax-policy/Pages/Tax-Analysis-and-Research.aspx.
Chuck
Your adoration of Mr Buffet knows no bounds as long as Buffet advocates higher taxes for everyone...(...except himself) . See Barron's April 11, 2015 entitled "Warren's Nifty Tax Loophole" and you will find a clear explanation of of his tax hypocrisy which not only benefits himself personally but actually cost the Federal Treasury lost revenue from thousands of others.
Stuart, your link notes in 2010 the system of law taxed Mr. Buffet’s $40 million income at 17%. The system of law in 2010 taxed the top 400 incomes, averaging $265 million, at 18%. Mr. Trump’s trickledown tax plan would further lower the tax rate on the top 400 incomes.
In 2013, only seven companies paid more corporate taxes than Buffet’s company, Berkshire Hathaway. Buffet has stated U.S. corporations are competitive without a tax cut. With national debt as a share of GDP the highest since WWII, restoring the 46% to 52% corporate tax rates of 1951-1986 perhaps has merit.
Chuck
You really need to review your Econ 101. The brave new world of international trade puts corporate tax as a cost of goods recovered in consumer pricing . Competing goods from countries with lower tax corporate burdens can undercut American goods. Corporate taxes are no different than labor costs.as items of price/ cost recovery.
Note that generally foreign company VAT taxes are actually returned to the paying companies on all goods they sell outside such foreign c country! US corporate taxes on foreign sales are not returned.....infact they taxed both abroad and again in the US if the money is repatriated!
In addition to remain price competetive the corporate tax cost burden puts pressure on reducing all other production costs....Including their component labor costs! High corporate taxes are no friend of labor.
Check out the growth in Gates' and Buffets' net worths over the past 8+ years. Obama Fiscal policy failed and the Federal Reserve had to step in by driving interest rates to an effective 0%. This rate drove all liquid investment into stocks with a resulting gigantic increase in wealth inequality. Principal benefactors of note were: Gates, Buffet,Zuckerberg, Bezos,Soros etc......On the other side of the ledger all of the retired people or people approaching retirement who invested conservatively for their golden years saw their income and net worth wiped out! I believe that the top tax rates were raised during this period, and yet the National debt doubled, wages stagnated and the labor participation rate dropped to its lowest level in decades!
We cannot tax our way out of this box.....we must grow our GDP to get out ....and increased corporate taxes are anti growth!
Conservative Econ 101 since 1982 has grown a bumper crop of trickle-down stories and a mountain of national debt. Tax cuts benefit primarily the .01%.
Chuck
Half of the current total national debt was incurred under Obama with an increase in Top tax rates ( be sure to add in the ACA surcharge and the dividend and capital gains surcharge of 3.8%).
Debt fell dramatically between 1947 and 1981 under considerably higher individual income and estate tax rates. Obama's rates run about half the 1947 rates. Obama’s 2013 tax increase may present little more than a speed bump to growing national debt.
October 19 marks the 30th anniversary of the 1987 stock-market crash, the biggest percentage loss in the history of the Dow Jones Industrial average, a drop of over twenty percent. The 1987 crash followed Reagan’s tax cuts. The Great Recession followed Bush’s tax cuts. A similar fate perhaps awaits Trump’s tax cuts.
Chuck
Your abuse of statistics to suggest causation where at best there is time correlation is just remarkable! You cherry pick so called statistics without logic and then impose an argument wholly unsupported by the full facts of your cited time periods. Let me give you an example based on your last paragraph above......"Roosevelt's New Deal was in effect right up through 1941. America's entery into World War 11 was in December 1941" I suppose you could state based on that timing that America entered into World War 11 because of the New Deal!
Or let's try ?.."The Fall of the Berlin Wall followed the Regan tax cuts"
Okay, let’s go back to 1857. Of the nine worst US economic crises (Panics, Depressions, Great Recession, etc.) going back to 1857, seven had a Republican controlled Congress and seven had a Republican President.
Chuck
Thank you for proving my point!
Missing seven of the last nine shots won’t prove the next one will miss, but it does suggest a pretty lousy shot.
I would submit that Vincent Miller doesn't know the jot of an iota about which he discourses, nor does he have the intellectual curiosity to examine the data for himself. The Clinton tax cuts, largely in cap gains, coupled with an aggressive re-orientation of welfare programs, produced the largest increase in per capita real incomes of the bottom decile of wage earners since the Kennedy Administration. The greatest advances in real personal incomes took place when the top marginal tax rate was cut. Them's the facts.
"But Vincent Miller, Gudorf Chair in Catholic Theology and Culture at the University of Dayton in Ohio, is concerned the president’s plan will exacerbate inequities in the tax system while laying the foundation for a kind of intergenerational injustice, forcing greater deficit spending now and passing the tab to future generations. Previous tax cuts, he says, produced “spikes of inequality.” "
Trump's and the Republicans' tax plan is merely a tax cut for the wealthiest citizens in the nation. It is just one more instance of corruption in the most corrupt Congress and president in living memory. Pretending that it is not about corruption is deceitful.
Lisa
Your statement is simplistic nonsense. The greatest growth in the spread of inequality in U.S. income and wealth occurred during the last 8 years precisely because the Obama Fiscal Policy totally failed and the Federal Reserve had to take over with a draconian monetary policy which by aggressively destroying interest rates forced investments into the stock market resulting in enormous increases in the value of stocks. As a corallary , Obamas reliance on that monetary policy destroyed the incomes of the elderly and retired who had conservatively invested in bonds for their supposed "golden years". Any reading of the Federal Reserve policy notes and Chairman Ben Bernacke's statements will demonstrate these facts. The result has been an economy which is has been stubbornly frozen at a maximum 2% growth which is perpetuating the expanding wealth inequality.
Social Justice principles are still subject to the effects of the economic rules that govern the movements of money and wealth. You may decry that fact but it won't fix the disconnect.
Mr. Miller's historical comments are misleading:
Omnibus Budget Reconciliation Act of 1993 enacted August 1993. Created two new higher tax rates 36% and 39.6%. Signed by Bill Clinton. The Congress in 1993: Senate 56D/44R; House 258D/176R/1Independent.
Treasury Secretary Lloyd Bentsen, on August 3, 1993:
“What we’re doing here is restoring fairness to the tax system. Let’s make one point straight. When they talk about income tax on middle-income America, if you’re making less than $180,000 a year as a couple in your adjusted grow income, you don’t pay one dollar more of income tax. Not one. You’re looking at a situation where approximately 80 percent of the taxes paid will be coming from people that are making over $200,00 a year.”
Pres. Bill Clinton, TV Address to the Nation, August 3, 1993.
“Now we can truly say that change has come to America…The second principle of this plan is fairness: those who have the most contribute the most.”
OMB Director Leon Panetta, on August 3, 1993:
“So that's the reason we have taken on this challenge. And the plan basically reverses -- let's understand -- first and foremost, reverses the policies that we have seen over the last 12 years. That's the principal point of this plan, and to try to provide a new direction for this country in terms of our economy and our future. This is not the time for any more trickle-down economics, and it's certainly not the time for any more excuses as to why we can't take on this challenge.”
Since then, various taxes on top-level incomes have been increased. The "Bush (43) tax cuts" were allowed to expire for the top one percent of incomes (preserved for all lower incomes). The ACA contains new income tax surcharge on earned incomes and investment income of the top "one percent."
The article calls for a progressive tax system. United States already has the most progressive tax structure in the developed world.
The debate is always worthwhile, but to get to a worthy result we need to deal with facts, not hype.
Jesus Christ was never fearful of the rich - he embraced them and asked them to repent like the rest of us. The anger of Jesus is displayed against hypocrisy and institutions that cultivate it. The Catholic Church is no paradigm of fiscal virtue and wallows in hypocrisy like the rest of humanity.
Even the most ignorant of us are able to recognize that our economy is in dire straits and that more of the same, will indeed bring us more of the same.
The crude expressiveness of our President should not blind us to real possibilities of economic growth, reducing the number of paid and unpaid government dependents and allowing the power of God to flourish through personal enterprise and subsidiarity.
Is that not what we are supposed to do with our Talents?
"Catholic Charities USA, the largest charitable organization run by the church, receives about 65 percent of its annual budget from state and federal governments, making it an arm of the federal welfare state, said Brian Anderson, a researcher with the Manhattan Institute. Catholic Charities received nearly a quarter of its funding from government by the end of the 1960s, more than half by the late 1970s and more than 60 percent by the mid-1980s, the level where it has remained ever since, Mr. Anderson said".
http://www.washingtontimes.com/news/2015/sep/24/catholic-church-collects-16-billion-in-us-contract/
Recently Cardinal Dolan sat between Hillary Clinton and Donald Trump at the annual Al Smith fund raising Dinner in New York City. Jesus said that no one can serve two masters, in this case the Catholic Faith and the government's money, as in the US Catholic Charities is in fact an arm of the Federal government receiving approximately 60% of its annual income from the government.
"In 2010, Catholic Charities had revenues of $4.7 billion, $2.9 billion
of which came from the US government. Only about $140 million came from
donations from diocesan churches, the remainder coming from in-kind
contributions, investments, program fees, and community donations.
"The truth of the matter is that the Obama administration has actually increased funding for Catholic nonprofit organizations and programs. In fact, more than $1.5 billion went to Catholic organizations over the past two years.
These articles are what makes me wary of the term "social justice". The idea this quote "Though it is considered near anathema in U.S. politics, Catholic social teaching has always endorsed the role of wealth redistribution via tax policy" is most likely a central theme in Catholic social justice should rightly make any American uneasy. It is basic Marxism. To each according to his needs, from each... Well you get the idea. Be careful what you wish for as Marxism/Communism/Socialism is a death knell for religion in those countries especially Christianity.
As far as the tax policy specifically, here is some information to chew on: "In 2013 (the latest data year available), the top 20 percent of households paid $1.2 trillion in income taxes. The next 20 percent paid just $175 billion. The bottom 60 percent collectively paid $0. Actually, the IRS paid them $17 billion, thanks to refundable tax credits. Put another way: Household income tax bills averaged $47,000 for the top income quintile, $7,000 for the next quintile and negative $200 for the bottom 60 percent." NYPost 10/6/2017
Basic logic dictates that when 20% of taxpayers pay 88% of taxes while 20% pay the remaining 12%, um, who do you think will get a tax cut if taxes are cut? When is enough, enough?? The estate tax was mentioned in a comment. How many times should you be taxed on the same money/property? When you earn/buy it? (Year 1) Then when it grows and you pay taxes on your earnings each year? (Year 2 - ??) Then again when you try to give it to your children?? (Year ??) When will it be enough? What obligation do I have to pay taxes on something numerous times just because I've been successful? I've grown weary of the approach to push the top down by giving to the bottom to make everyone equal. Look at those countries where this has "worked". Everyone is just equally miserable. It's shameful and goes against using the talents God gave you. If I'm going to be taxed at 60, 70 80%, you can be darn sure I won't ever fulfill my potential. There is no real incentive for it.
Finally, just so we are clear, government taking what is someone else's and giving it to a third party isn't charity. It's bribery. Another clever trick to pit groups against each other so they can continue to wield power.
“…when 20% of taxpayers pay 88% of taxes while 20% pay the remaining 12%…” should not surprise anyone starving the beast. The “beast” being the federal government and “starving” the cutting of federal revenue by cutting taxes and shrinking the tax base.
In 1984, eighteen percent of federal tax returns had zero tax liability. That same year, tax cuts and shrinking the tax base began under Reagan. The number of federal tax returns with zero tax liability, jumped to 24% by 1994, 32% by 2004 and 47% by 2012. A $15/hour minimum wage perhaps would grow the tax base.
Chuck
you omit the complete facts: in 2016 approximately $66 Billion was actually paid out under "The Earned Income Credit" to individuals who made no contribution to the income tax levy.
This was just one of approximately 80 anti poverty programs which spend roughly $1Trillion per annum!!!
Please consider this tax program in light of Catholic teachings.
TAP Tax Plan Beats Trump Tax Privileges
1 Avoid government interference with economic decisions by taxing all income the same, allowing no deductions.
2 Eliminate all the bureaucracies which administer personal benefits by directly paying heads of households which are below the calculated poverty level for their residential area in the form of a monthly negative income tax based on earnings reported by their employers and financial institutions for all in the household for the previous month.
3 Corporations that raise government costs by paying wages that leave people qualified for government benefits shall repay those benefits plus a 20% service charge. Repayments shall not apply to benefits due to having more than three dependents.
4 End corporate income tax by requiring all corporate earnings each year to be attributed to individual stockholders to be taxed at the uniform rate. Allow stockholders to require such earnings to actually be paid out.
5 Simplify the tariff system and end favoring certain industries by allowing transferable credits for every dollar received for exports to offset every dollar spent on imports. Imports not offset by credits would all pay the same tariff.
6 Set the tariff rate so as to pay off the national debt in fifty years. Establish the calculation system by law so that Congress could only change it by a two-thirds majority of both Houses.
7 Establish a single personal income tax rate to pay the interest on the national debt and the actual expenditures of the previous year through a calculation system by law so that Congress could only change it by a two-thirds majority of both Houses.
8 The single income tax rate should be allocated to five household income brackets based on the employer and financial institution reports for the total amount received by all members of the household claimed each calendar year.
8.1 Those beneficiary households receiving a negative income tax cannot pay any positive income tax.
8.2 The normal households in the statistical middle income quintile for the entire country shall pay the flat income tax rate.
8.3 Those deprived households not receiving negative income tax, yet below the middle quintile in household income for the country shall pay no income tax.
8.4 The number of beneficiary households and the average amount paid to each and the amount of taxes which would have been owed by the average beneficiary household shall be calculated and an equal number of the wealthiest houselhold shall pay a tax surcharge equal to the average combined benefits and taxes not paid.
8.5 The affluent households above the middle class and not calculated to be in the wealthiest tax bracket shall pay a tax surcharge equal to the average income tax which would have been owed by the average deprived household.
8.6 Tax bills based on these calculations shall be provided by the federal government to each person for whom income has been reported by 28 February each year and balances due over withholdings already received shall be due by 30 March. Household membership claims for the year may not be adjusted after 30 March.
9 No other benefits to any human or corporate person shall be provided through the tax system except the household negative income tax. All other benefits shall be appropriated by Congress annually and all recipients shall be published within ninety days of payment being issued. All such payments shall be included in the calculations of the single income tax rate for the year.
Tom, I'm not an accountant nor a tax lawyer but from what I've understood of this proposal, it is just a different way of stating those that make more money will subsidize those in lower income brackets. Additionally, companies will be "punished" if the employee qualifies for a government subsidy due to the "inadequate" pay that company provides by repaying the difference plus a 20% penalty. I guess personal choices don't factor into this. Additionally, it forces those who are well off to pay off the national debt in 50 years through another tax. Yeah, this sounds much fairer and just. BTW, I notice the term "deprived" comes up in this a few times. Question... deprived of what under the Constitution and Declaration of Independence? Life, liberty and the pursuit of happiness? I don't think so as everyone has an opportunity to succeed though some of us may have a more difficult path than others. I have yet to find in all my reading the guarantee of equal outcome which is what these types of plans propose. Maybe instead of trying to fix inequities through wealth redistribution we go back to the time when we rewarded families that stayed together with a father and mother working together for the betterment of their families, finding value in that and passing those values along to their children. If you think that more redistribution is going to make things better, look back at the Great Society legislation and the decimation of the family it left in its wake. The poor families living in the inner cities were destroyed and despair and misery were inflicted upon them as a result. Those who forget history are doomed to repeat it.