tax breaks

Falling off the Fiscal Cliff: 5 Things You Need to Know

Image by Tim Teebken / Getty Images

Image by Tim Teebken / Getty Images

Now that the election is over, policymakers and the media have refocused their attention on the looming budget battles in Washington. In January, a variety of tax increases and spending cuts will go into effect unless Congress and President Barack Obama agree on a plan to avoid what has been deemed “the fiscal cliff.”

As the country braces for another fiscal showdown in the nation’s capitol, here are five things you need to know on the issue likely to dominate the news over the next several months. 

    Missing Servant Leaders on Corporate Tax Responsibility

    We're sorely missing the servant leadership of America's CEOs on matters of corporate taxation.

    As Congress contemplates trillions in budget cuts that will worsen poverty and undermine the quality of life in America, consider these findings from a new report that I co-authored, "Massive CEO Rewards for Tax Dodging," by the Institute for Policy Studies.

    Last year, the compensation of 25 CEOs at major profitable U.S. companies was larger than the entire amount their company paid in U.S. corporate taxes.

    These 25 include the CEOs of Verizon, Boeing, Honeywell, General Electric, International Paper, Prudential, eBay, Bank of New York Mellon, Ford, Motorola, Qwest Communications, Dow Chemical, and Stanley Black and Decker.

    Picture This

    Picture this: Hundreds of thousands of women, men, and children plod across barren cracked earth. Dead cows and human corpses litter the roads, revealing to us evidence of two things: 1) the hottest summer on record in Somalia, which caused the worst drought and famine in 60 years; and 2) twenty years of a truly failed Somali government swallowed up in cycles of violence.

    Picture this: Posturing politicians claim to stand up for the rights of Americans, even as they hijack the proverbial steering wheel of America. They hold a proverbial gun to the heads of every American, and say outright that they'd have no problem driving us all off a proverbial cliff if millionaires and billionaires don't remain protected from raised taxes, and if we don't cut more programs that protect working and poor people.

    What Would Jesus Tax?

    In the face of state and federal budget cuts, many of us have been fasting and contemplating the question: "What would Jesus cut?" In light of tax day, however, we might equally contemplate: "What would Jesus tax?"

    After all, a great deal of our budgetary stress is the result of declining revenue, thanks to the economic downturn and decades of tax cuts.

    A new report that I co-authored, "Unnecessary Austerity," argues that before we make draconian budget cuts at the federal and state level, we should reverse huge tax cuts for the wealthy and tax dodging corporations.

    The Jesus I know would be concerned about the extreme inequalities of wealth and power that have emerged in our communities. He would rail against principalities and powers that rig the tax rules so the privileged pay less.

    He would lament the destruction of God's creation through excessive consumption and pollution. And, he would be alarmed about financial and commodity speculation driving up the cost of food and worsening hunger. (In today's world of high finance, someone would be hedging investments on how quickly Jesus could multiply loaves and fishes.)