Taxes and the Common Good

When Jesus invited the tax collector Zacchaeus down from his sycamore tree, did they sit in the shade and discuss capital gains rates and oil depletion allowances? We're missing some transcripts that could serve as an ethical guide to our current tax debates.

The already-contentious dispute over tax policy promises to be even more polarized this year, with growing evidence of aggressive corporate tax avoidance, rising concern over our national debt and deficit, and the devastating impact of budget cuts at the federal, state, and local levels.

Everyone agrees we should reform the federal tax code, but there are widely divergent visions as to how.

The Business Roundtable, a private organization comprised of major corporate CEOs, advocates reducing the already loophole-ridden corporate income tax. Rep. Jan Schakowsky of Illinois calls for $144 billion in new taxes on the wealthy to trim down the deficit and reduce glaring economic inequalities.

 Most lawmakers agree that our revenue system should be simple and fair and raise adequate revenue. Yet there is also recognition that the rules of our tax system should reflect deeper values and serve the larger common good. Just as "budgets are moral documents" -- reflecting our most deeply held beliefs and priorities -- so are tax policies. There is no such thing as a "value neutral" tax system.

Our present tax code values income from wealth, such as capital gains, over income from work and wages. It gives preferential treatment to the investment income of a hedge fund investor and taxes that income at a lower capital gains level of 15 percent. But we tax the earned wages of a doctor or a scientist at a top income tax rate of 35 percent.

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