Tax Justice is Essential to a Faithful Federal Budget
Remarks as prepared by J. Herbert Nelson
Faithful Budget Congressional Budget Briefing
April 28, 2015
My name is J. Herbert Nelson and I am the Director of the Presbyterian Church (U.S.A.) Office of Public Witness. Over the last several years, our Church has expressed increasing concern over inequality in our society. In the Gospel of Luke, we Christians are taught that “to whom much is given, much will be required” (12:48). As a faith coalition, you will hear that we are calling for “reasonable revenue for responsible programs,” AND today, speaking for the General Assembly of the Presbyterian Church (U.S.A.), I would add to that the tax code is not only a way to make sure we have enough revenue to pay for the programs we think are important; but also it is a tool for reducing inequality and leveling society. The Presbyterian General Assembly issued a new statement on tax justice last year, in which it said, “Paying taxes is part of a set of moral obligations for a coherent social order.” Those who have been blessed with abundance must contribute more to the good of all.
That Assembly last year called this period we are living in “a New Gilded Age” and said that tax justice requires change if we are going to live faithfully to our conscience and to the ethical concerns for the common good shared by all citizens. However, the recent events in the aftermath of Michael Brown’s killing in Ferguson, MO, and Freddie Gray in Baltimore, MD on yesterday reveal a deeper sense of frustration in disenfranchised communities. I am led to define this moment – great economic disparity and deep-rooted systemic racism – as the emergence of a new poor people’s movement in the United States. The massive numbers of persons across this country that are marginalized in communities redlined from jobs, transportation, decent wages, education and opportunities to achieve a decent standard of living are coming together in thought and common sympathies.
On yesterday in Baltimore, we saw children take to the streets looting and burning. Their actions represent a weariness of being taken advantage of by people in high places who possess the majority of the wealth; carve out for themselves the greater portion of tax breaks; and then pass the tax burden on to the poor. The ironic aspect of this struggle is witnessed last night and today on social media. Many former middle class Anglo-Americans who lost their jobs during the recession and/or returned to a workplace where their jobs are downgraded after the recession are sympathizing with these children and adults who looted and rioted yesterday. Although many struggle with the rioting based on their predisposition for peace, their concerns expressed are more germane to the absence of efforts to improve public education; establish a jobs program; strengthen a social safety net that helps workers who are not making an adequate wage, so that they can pay more toward taxes without being driven into the ditches of economic despair. These much needed building blocks within our nation can only be accomplished with a fair tax system at the roots of public policy. But this is not the case today.
Just taxation is a key tool for enabling communities to thrive, for advancing science and culture, for sustaining democratic institutions, and for ensuring a strong social safety net that is there to catch people when they fall. Each citizen has an affirmative duty to contribute to the common good by paying their fair share of taxes.
There is both an ethical and economic case for a fairer tax code. The U.S. tax system is regressive. Poorer and middle class households pay a higher proportion of their income in payroll, state and local taxes, including sales tax – at higher rates than those who pay lower tax rates on unearned income like capital gains and carried interest. In other words, those who make their living through investments are taxed sometimes at a lower rate than those who work 40 hours per week standing at a cash register or restocking shelves. Further, tax mechanisms, like the Estate Tax, that produce revenue from higher income households have been unnecessarily weakened in a time of increased wealth disparity and excessive influence of private interests in public policy. And those who itemize their tax returns can take advantage of huge deductions that reduce their proportionate tax liability, while low- and middle-income families settle for the standard deduction. This disparity in our tax code -- the difference in the way we tax earned and unearned income -- and the lack of overall progressivity when you look at all the levied taxes, not just the income tax code, means that those with less in our society bear a greater proportionate tax burden than those who have more. This must be fixed. Just taxation is a foundation of a moral society’s answer to poverty and its close relatives, inequality, economic insecurity, and social immobility.
We do support , in many instances, credits like the earned income tax credit -- the EITC -- and the refundable Child Tax Credit, help ensure working people a living wage, are both are longstanding features of the tax code, supported historically by both liberals and conservatives. The need for this kind of investment is very great today, and the EITC, Child Tax Credit, or similar measures aimed at keeping working families out of poverty, should be expanded, made fully refundable, and made permanent.
We do believe there are measures this particular congress can take to help rebuild the fiber and the life, but more importantly to rebuild this nation in a way of awareness about what it means to live in community and to forge community, without having to take or rob from anyone to give to someone else. We ought to pay our fair share, and we ought to be reminded as our gospel and the Christian faith informs us that as we’ve done to the least of these my brothers and sisters, we’ve also done unto our God and unto ourselves.
Full Speech here: https://www.youtube.com/watch?v=HrpZ90wI_Y8