The Case for Fair Taxes

By Justin Hubbard 11-27-2012
Photo: Tax forms,  © Garry L. /
Photo: Tax forms, © Garry L. /

Earlier this month, I went to vote at our local middle school in North Durham. It was one those winter-tease days, colder than usual, a glimpse of the coming months in North Carolina. As I walked into the school’s auditorium, I was met by poll monitors with visible breath and bundled-up like Ralphie’s brother from the movie A Christmas Story. For a Midwesterner, cold temperatures in North Carolina is a warm day in the fall, nonetheless, it was clear the monitors as well as voters were uncomfortable and frustrated with the conditions. While searching for my name in the voter list, I overheard one monitor pleading with an administrator to get the heat turned on, fearing the cold atmosphere might shoo voters away.

When I left the facility, I couldn’t help but wonder at the irony of the situation. In a crucial election with many issues at stake, including tax fairness, our local voting facility struggled to provide reasonable and comfortable conditions for the voters. It might be unfair to assume that the lack of heat in the earlier morning hours is related to the school’s budget, and subsequently, tax revenue. Perhaps the custodian simply forgot to turn it on. But, as national, state, and local governments continue to cut back on budgets and programs due to the lingering recession’s effects on revenue, the public sector and often those in lower-income neighborhoods are taking the brunt of tax policies and restructuring.

In the wake of the election season, the issue of taxation continues to be at the center of political discourses and debates, most recently laden with fears of the fiscal cliff. No one likes to pay taxes. No one likes to see that chunk of money taken out of their paycheck, or to arrive at a cash register only to find an increase in the price of their goods due to a sales tax. However, as a system put in place to assist with the provision of public services, taxes are necessary to provide for the well-being of individuals and communities in a given locality, state or country. Whether public education, safety, or roads, there is a lot we take for granted in a culture that often asserts a “don’t tread on me” ethos, an individualistic proclamation of entitlement that ignores the importance of fair tax policies and ultimately neglects the most vulnerable voices and bodies that bear the burden of unjust policies.

Susan Pace Hamill, a Professor at the University of Alabama’s School of Law has recently argued for tax reform based on Judeo-Christian ethics after exposing the unjust tax structure that exploits and oppresses the marginalized in her home state. In her book, The Least of These: Tax Reform and the Moral Duty of Christians, she argues that a well-orchestrated tax structure “should raise adequate revenues to meet the needs of the community subject to the tax and spread out the burden of paying the tax in an equitable or fair manner.” Though Alabama’s unjust taxation holds its own unique challenges, there is concern in light of recent proposed policies and legislation already passed (see “A new loophole for businesses will cost state 336 million a year”) that North Carolina is headed down a similar, uneven path.

A new report by the North Carolina Justice Center (NCJC) highlights recent proposals in personal income and sales tax policies meant to modernize North Carolina’s revenue system. However, this study exposes the economic assumptions behind these policies and questions their ability to respond adequately to the growing need for public investment and services while retaining its principles of equity, adequacy and stability. Most concerning are the proposals by policymakers that suggest eliminating the personal income tax or replacing the current progressive income tax with a flat personal income tax rate…Doing so would require all but the highest-income North Carolinians to pay a higher effective tax rate and would undermine the state’s economic growth in both the short and long terms.” Moreover, in order to increase the revenue from other sources, these policies advocate for increases in consumption-taxes, such as the sales tax. The report argues:

The sales tax is often mischaracterized as a “fair” tax in debates around tax policy. Proponents argue that the sales tax affects everyone equally because the tax on an item is the same no matter who buys it. But actually, it is the very claim of “equality” upon which sales taxes fail the test of fairness. The cost and sales tax on a bottle of laundry detergent is the same for a high-income person and a low-income person. But the rich person has many times more income, and thus the amount of tax paid on the      bottle of laundry detergent is much less significant an expense (i.e., a smaller share of their income) than it is for the middle- or low-income person. Furthermore, the sales tax is not levied on every single transaction that takes place in the economy. While the sale of many tangible goods is subject to tax, far fewer services are included. Low- income families are likely to spend a larger share of their incomes on tangible goods and taxable services than high-income families are, further reinforcing the disproportionate impact of sales taxation on low-income families and individuals.

Consequently, the combination of a change in the current progressive personal income tax to a flat-rate, or worse, elimination of the tax altogether, plus an increase in consumption tax, places a heavy burden on low-income individuals and families. Instead of encouraging and providing avenues out of economic inequality, these policies will keep them confined to economic immobility or worse, further press against them and increase their burden.

The challenge to faith communities is not to deduct a set of moral principles from scripture that houses a model for a fair tax system. There are no formulas or bureaucratic maps that arise out of biblical texts that we might apply to our current context and tax system that will magically make the system fair. Rather, the biblical texts provide a framework to understand the Christian witness towards the common good and a Christian ethic of love and care for the vulnerable and exploited. Within the Old Testament texts we read of the economic practices in ancient Israel that seek distributive justice and equality throughout the community and beyond, as well as, the exacting prophetic voices that confront economic injustice. These themes are enriched by the New Testament’s continued admonishment against the accumulation of wealth (“tax collectors” were admonished for unjust practices for the sake of their wealth, not for their vocation itself), concern for “widow and orphan,” and advocacy for a subversive posture in order to initiate broader change in societal structures.

Perhaps what is most needed is a broader and more robust understanding of the “common good” and the “we” that makes up the place in which a theological understanding of the common good inhabits. “We,” you, me, strangers from different backgrounds travel the same roads, ride the same buses, buy the same essential goods. On this side of the eschaton and in this particular place and moment, we seek the welfare of Babylon despite its imperial rule through the best and most just means. Currently, this involves the contribution to the welfare of the city or state through taxation. Even still, it is easy to neglect one another, and even easier to fail to see those that fall to the margins of the society, cold and weary from neglect and systemic injustice; shivering even as we attempt to participate in a political process that often fails too often to contribute equally to the common good. In these tense economic and political times, it is easy to seek the welfare of one’s most immediate surroundings, family, and community, at the cost of those less proximate, less encountered, less seen. So as to avoid heading down the road from Jerusalem to Jericho, ignoring the shivering and battered bodies along the tax-sustained roadside, faith communities should act as the Good Samaritan, repairing the wounds inflicted by the unjust tax system by advocating for fair tax policies.

Justin Hubbard is an intern at Duke Divinity School. This post originally appeared in the North Carolina Council of Churches blog.

Photo: Tax forms,  © Garry L. | View Portfolio /

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