The Common Good
September-October 2003

Class Warfare

by Jim Wallis | September-October 2003

'People hate this kind of talk. Raw truth is never popular.'

I did a right-wing talk show the other night on Fox News. Whenever you mention poverty in a venue like that, they scream that you're engaging in class warfare and promptly declare war on you.

I've decided that the right wing is correct on this: There is a class war, but they and their political allies are the ones who have declared it. As Episcopal Bishop John Chane said at a recent Sojourners/Call to Renewal chapel service: "We've gone from a war on poverty to a war on the poor."

Last year, Susan Pace Hamill, a University of Alabama tax law professor, took a sabbatical to earn a Master of Theological Studies degree. She wrote her thesis on "An Argument for Tax Reform Based on Judeo-Christian Ethics." In it she applied "the moral principles of Judeo-Christian ethics" to Alabama's tax system, seeing reform as "a critically important step toward ensuring that Alabama's children, especially children from low-income families, enjoy an opportunity to build a positive future."

Those "moral principles" came into sharp focus in three news stories this summer. The first related directly to Alabama and its Republican governor's proposal to reform the state tax system. The other two showed the same principles on the national scale. One was about the exclusion of 7 million low-income working families—and their 12 million children—from the child tax credit that other families are receiving. The other was the latest IRS annual report, showing huge increases in the wealth of America's 400 richest taxpayers.

In all three, the moral contradictions are too great to ignore. The deepening injustice of America's growing wealth chasm is increasingly impossible to justify. It's becoming a moral, and even a religious, issue.

ALABAMA HAS LONG had one of the most regressive tax systems in the country. A family of four earning $4,600 a year has to pay income taxes—a lower threshold than any other state. Property taxes are the lowest in the nation, which primarily benefits the timber industry in a state where 71 percent of the land is timber. The state sales tax is 4 percent, but local governments are free to add to it. Many do; in some counties it's as high as 11 percent, even on groceries. People with incomes below $13,000 pay 10.9 percent of their income in taxes, while those who make more than $229,000 pay 4 percent. How's that for fair?

Professor Hamill's thesis was published in the Alabama Law Review and came to the attention of the new governor, Bob Riley, a conservative Republican and former member of Congress. This year Alabama, like most of the 50 states, faces a severe budget crisis with a deficit of $700 million. Yet it is obligated by its constitution to have a balanced budget. So on May 19, Gov. Riley addressed a special session of the state legislature. "We cannot balance our budget with cuts alone," Riley said, "not unless we are willing to lay off thousands of teachers and cancel all extra-curricular activities, open prison doors and put convicted felons back on the streets, and force thousands of seniors out of nursing homes and take away their prescription drugs."

The governor then went on to propose a tax-reform package that included higher property taxes, higher income taxes on the wealthy, and no income taxes on the poorest people. The plan raises the threshold to pay income tax for families of four to $17,000—paying for it in part by raising corporate taxes on the timber industry. "I have spent most of my life fighting higher taxes," the governor explained, "...but I believe we have no other choice."

The plan has been approved by the state legislature, and now goes to a statewide public referendum in early September. Alabama's churches—including the Methodists, Presbyterians, Southern Baptists, Episcopalians, and Catholics, along with Jewish leaders—support the changes. The holdouts are in the Religious Right, led by the Christian Coalition. They, along with some state Republican leaders and business organizations, are leading the opposition.

Why the governor's change of heart? It turns out that he is deeply Christian, and he realized that his faith had something to say about the budget and tax situation. "According to our Christian ethic, we're supposed to love God, love each other, and help take care of our poor," he was recently quoted by CBS News. "And this is a step in the right direction." Here is a conservative Republican governor who has been reading his Bible and decided to put his Christian faith first.

THE SECOND BIG story is the exclusion of low-income working families from the child tax credit. That debacle is becoming a parable, revealing a spiritual lesson about what happens to poor families and their children, again and again—they are simply left out.

Most of the country now knows that the $350 billion tax cut passed this spring primarily benefited the wealthiest of Americans. Estimates are that each millionaire will receive $93,000. Yet 1 percent of the total tax cut—$3.5 billion—could not be found for families who struggle mightily just to get by. As part of the legislation, the child tax credit for middle- and upper-income families was accelerated, and checks of $400 are being sent out. The Senate added an amendment to also accelerate the refundability of the child credit, so that working families who earn between $10,500 and $26,650 would benefit.

But at the last minute, in the House-Senate conference committee, that amendment was dropped. Republicans said they wanted further reductions in capital-gains tax rates. When the deed was revealed and the storm broke, the Senate quickly fixed the omission in a way that costs the Treasury nothing. But the Republican leadership of the House, seemingly oblivious to the political damage feared by the White House, brazenly tacked the low-income family child tax credit onto another $78 billion tax cut for wealthier families—in other words, using the restoration of the measure for poor families to increase tax cuts for the rich.

The issue deadlocked, and some Republicans have actually admitted their tactic is an attempt to kill the child tax credit restoration altogether. As checks went in the mail for middle-class families, low-income working parents wonder why they got left out in the cold. Majority Leader Tom DeLay's answer: "There are a lot of other things that are more important than this." Unfortunately, Gov. Riley's former Republican colleagues in Washington, led by DeLay, haven't been reading their Bibles the way Riley has. Indeed, Tom DeLay is in danger of making himself into the Bull Connor of the modern anti-poverty movement, in consistently blocking most everything that would benefit poor people.

THE THIRD STORY dramatically showed what is happening to the distribution of income in America. In its annual tax analysis for 2000, the IRS reported that the top 400 taxpayers—only 0.00014 percent of the population—now take in more than 1 percent of the total income of all taxpayers. Meantime, their tax payments plummeted, mostly due to substantial reductions in capital gains tax rates. In 2000, the average annual income of the top 400 increased to $174 million, while the average income for the bottom 90 percent was $27,000. Even The Wall Street Journal calls it "So much money in so few hands...a startling accumulation of wealth at the very top of the income pyramid." The "income gap," wrote The Journal, is becoming a "vast chasm." For many religious people across the theological spectrum, that inequality is becoming intolerable.

I've been reading The Message, a paraphrase of the Bible by evangelical pastor Eugene Peterson that has sold millions of copies. Its renditions are vividly contemporary, and include some truth-telling from the prophets Amos and Isaiah about our current situation. "People hate this kind of talk. Raw truth is never popular…." "Doom to you who legislate evil, who make laws that make victims—laws that make misery for the poor, that rob my destitute people of dignity, exploiting defenseless widows, taking advantage of homeless children."

It's the kind of talk we don't hear much these days in America. But we need it. If those prophets were around today, they would surely be preaching about our tax and budget policies that enrich the wealthy and make misery for the poor. And I don't think they would have worried much when accused of class warfare.

Jim Wallis is editor-in-chief of Sojourners.

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