Taxes

Reform, Reduce, Destroy

The ideological architect of the Bush tax policies is Grover Norquist,

The ideological architect of the Bush tax policies is Grover Norquist, president of Americans for Tax Reform (ATR). Called by USA Today "the most influential Washingtonian most people have never heard of," Norquist has pursued for nearly two decades the conservative goal of shrinking the size of government through reducing tax revenue. Through ATR, founded in 1986, he coordinates the "Wednesday meeting"—a weekly strategy and coordinating meeting attended by all the major conservative organizations and regularly by administration officials.

Norquist’s fundamental belief is that taxation is theft—money the government "takes by force." It’s the libertarian view that has animated the conservative movement for years, grounded in an unshakeable faith that if economic decisions are left to individuals and the unrestrained free market, all will be well. Government is always the enemy, and the ultimate goal of the movement is—in a phrase that has now entered the online Dictionary of Public Finance—to "starve the beast." ATR’s mission statement says: "The government’s power to control one’s life derives from its power to tax. We believe that power should be minimized."

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Sojourners Magazine April 2005
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If I Were A Rich Man...

How we distribute the burden of sustaining governments determines in good part who prospers and who does not,

How we distribute the burden of sustaining governments determines in good part who prospers and who does not, who invests and who sinks into debt, who takes from society and who gives. When we decide who, and how, and how much to tax, and how to spread the burden, we shape the kind of nation we are and will become.

The moral philosophers of ancient Athens came to recognize this 2,500 years ago. When Athens was a tyranny it had a flat tax, an onerous burden that fell in the same amount on everyone subject to it. The less one had, the heavier the burden.

The philosophers of the Greek city-state concluded that morally the tax burden was upside down. Those who received the greatest material benefit from being Athenians should bear the greatest burden of maintaining Athens, they concluded. With this moral principle - taxation based on ability to pay - the Athenians invented democracy.

Every leading world philosopher from Aristotle and Plato to Adam Smith and Karl Marx, the fathers of capitalism and communism, has embraced the Athenian insight. Only in the past third of a century, in America, have these time-tested ideas been forgotten.

Today our airwaves, especially talk radio, are rich with denunciations of our supposedly progressive income tax, in which those who make the most pay the highest rates. Politicians who call themselves conservatives denounce the idea that those who make the most should bear a disproportionate burden.

They are ahistoric. Since taxation based on ability to pay spawned democracy, progressive taxation is the most conservative principle in Western civilization.

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Sojourners Magazine April 2005
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The Shame Deficit

A year ago Sen.

A year ago Sen. John McCain, an ardent supporter of the war in Iraq, took the Senate floor and chastised his fellow senators. "Throughout our history," McCain thundered, "war has been a time of sacrifice.... But about the only sacrifice taking place is that by the brave men and women fighting to defend and protect the liberties we hold so dear, and that of their families." McCain said he felt sickened by the tax cuts and pork barrel projects that Congress was passing. "This is a far cry from sacrifice."

Charlie Richardson, co-founder of Military Families Speak Out, is opposed to the war and advocates bringing home the troops. "It’s disgusting that they are asking families like mine to make enormous sacrifices while they give tax cuts to billionaires," said Richardson. "We’re having bake sales to buy Kevlar bulletproof vests to keep our kids alive in a war that never should have begun. Whatever happened to shared sacrifice?"

People on opposite sides of the Iraq war are shocked by the stunning inequality of sacrifice during this military engagement. Never in the history of U.S. warfare has Congress pushed tax cuts, let alone permanent tax cuts for the very wealthy. Historically, the opposite has been true: Wealth has been "conscripted," in the form of progressive income and estate taxes, to at least symbolize that everyone is contributing in some way.

THE U.S. HISTORY of progressive taxation is wound together with mobilizations for war. The first federal tax on wealth was levied in 1797, as our country was faced with the escalating costs of responding to French attacks on American shipping.

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Sojourners Magazine April 2005
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Bring It On

In the recently published collection of excerpts from William Sloane Coffin's speeches and sermons - Credo - appears this gem: "When the rich take from the poor, it's called an economic plan. When the poor take from the rich, it's called class warfare. It must be wonderful for President Bush to deplore class warfare while making sure his class wins."

The administration's 2005 federal budget amply illustrates Bill Coffin's point. As The Wall Street Journal put it, "The budget reflects the president's top political priorities - taxes and security - at the expense of other domestic programs."

Once again, the highest priority is more tax cuts for the wealthy, which have become the centerpiece of the Bush domestic policy. The budget proposes to make permanent the tax cuts from 2001 and 2003 that benefit high-income people, while not extending tax breaks for middle-income families. The second priority is further huge increases for the military and fighting terrorism. The budget proposes a 7 percent increase for military spending and a 10 percent increase for the Department of Homeland Security. And all that's before returning in the fall for what the administration admits will likely be as much as $50 billion in additional funding for the continuing occupation of Iraq.

And what of domestic priorities - especially the vast array of programs that benefit poor and working families? According to The New York Times, the budget calls for the elimination of 65 programs and cuts in 63 more. Those to be eliminated altogether include community development block grants, HOPE VI public housing renovation, rural housing and economic development, and juvenile crime prevention grants. Those cut include a 7 percent reduction for the Environmental Protection Agency, along with programs to deal with dropout prevention, support for local police and firefighters, and funds for guidance counselors in elementary schools.

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Sojourners Magazine April 2004
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Shrink, Shift, Shaft

Facing budget shortfalls in Arizona, a leading state senator announced that legislators were reviewing all state spending and that "nothing was sacred."

But the religious coalition Protecting Arizona's Families responded, "Is nothing truly sacred? What about state programs for the hungry, homeless, and mentally ill children? Do they stand on the same moral ground as subsidies for corporations? And why won't we consider raising taxes on the wealthy before we cut programs on the poor?"

Active Christians and other people of faith are accustomed to weighing in on the morality of public spending and budget choices. Much of our recent attention has been focused on how our tax dollars are being used to advance an imperial foreign policy.

But we should also be alarmed at the changes being legislated to reshape the way our government raises money through federal and local tax systems. Federal tax cuts in 2001, 2002, and 2003 have fueled massive deficits and blocked possibilities for spending on human needs. These tax cuts have "trickled down" to worsen state and local budget deficits, forcing deep cuts in spending on poverty,

health care, and education. Almost every state has been plunged into its worst budget crisis since World War II. According to the Center on Budget and Policy Priorities, states are facing budget gaps totaling $85 billion in the coming year.

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Sojourners Magazine April 2004
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The Lawyer, the Bible, and the Governor

Susan Pace Hamill, a professor at the University of Alabama Law School specializing in federal corporate tax law, had previously worked at two prestigious law firms and at the IRS. Her research on the Alabama tax codethe most regressive and harsh on the working poor of any in the countryled her to write "An Argument for Tax Reform Based on Judeo-Christian Ethics." Her article convinced Alabama's conservative Republican Gov. Bob Riley to propose a state constitutional amendment that would have revolutionized tax policy in Alabama. The proposal failed in the 2003 vote, but the reform work continueswith the potential of spurring a nationwide movement for tax justice. This is her story, as told to Sojourners associate editor Julie Polter.

I had lived in Alabama seven years, which has more taxes than you could shake a stick at, and I had never focused on the state and local inequity. I'm not proud of that. However, I did notice that the first property tax bill for our house was so low that I thought it was for the month instead of the year. I read grocery sales slips thinking, "That's too high on groceries, that's not right." And every year for state income tax I would get refunds while I was writing checks to Uncle Sam.

Meanwhile, my kids are attending a C- funded school system, one of the few in the state I deem minimally adequate, and every year the teachers are begging for donations to cover things. The signs of inequity were there, but I refused to put them together because I didn't view it as my problem. I would think, "I'm not a state and local tax specialist. I'm a federal person—I'm too busy."

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Sojourners Magazine April 2004
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Class Warfare

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.

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Sojourners Magazine September-October 2003
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The Publick Expence

WILLIAM H. GATES Sr. and Chuck Collins are clear and persuasive in their January-February article "Tax the Rich?" But to their logical arguments of the gains the rich receive from governmental action and their arguments of the religious imperative ("to whom much is given, much is expected"), an additional historical argument can be added. Both the father of capitalism, Adam Smith, and two of the leading founders of these United States, John Adams and Thomas Jefferson, believed that the rich should pay more taxes than the middle and lower classes.

Smith wrote: "It is not very unreasonable that the rich should contribute to the publick expence, not only in proportion to their revenue, but something more than in that proportion." Adams approvingly wrote, in a letter to a Dutch supporter of American independence, that taxes were "heaviest upon the rich and the higher Classes of People." Jefferson wrote that, below a certain point, people should be exempt from taxes and that government should "tax the higher portions of property in geometrical progression as they rise."

While none of these quotations specifically refer to estate taxes, estate taxes are one element in an overall policy of progressive taxes. And that is clearly what all three advocated.

John E. Hill
Quincy, Massachusetts

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Sojourners Magazine May-June 2003
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Tax the Rich?

William Gates Sr.—whose son is Microsoft founder Bill Gates—joins with co-author Chuck Collins to argue that the wealthiest among us have an obligation to pay their fair share.

In the last several years, Congress has debated whether to eliminate the federal estate tax—or "death tax"—our nation's only levy on accumulated wealth. The paltry debate over elimination of the tax has not grappled adequately with the negative consequences of repealing the estate tax.

One hundred years ago, during the first Gilded Age, we had a rigorous debate about the dangers of concentrated wealth in a democracy. The debate over the estate tax goes to the heart of the question of "what kind of country do we want to become" and ethical questions about society's claim upon the accumulated fortunes of the wealthy.

Ten years ago, a number of wealthy families—including the heirs to the Mars and Gallo fortunes—began bankrolling a campaign for wholesale repeal of the tax. Instead of revealing the true beneficiaries of repeal—households in the top 1 percent of wealth holders—they put forward a media campaign representing farmers and small-business owners as injured parties to the tax. Much of this mythmaking, however, has obscured the dangerous impact of eliminating the tax.

Proponents of repeal argue that the estate tax is un-American, that it punishes success and discourages parents from passing on wealth and businesses to their children. They successfully included elimination of the estate tax in President Bush's Tax Relief Act of 2001, through which the estate tax would gradually be phased out and then repealed for one year in 2010. Now repeal advocates are pressing to permanently eliminate the estate tax.

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Sojourners Magazine January-February 2003
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Terms of Engagement

A dramatic story occurred behind the scenes as Congress debated the tax cut bill this spring. Several faith-based organizations did something very important—they helped make sure that America’s poorest families were included in the benefits of the new tax cut. Religious leaders joined to support the valiant efforts of child advocates and low-income people’s organizations who were able to insert a refundable child tax credit into the legislation, one aimed at helping the nation’s poorest children who had been completely left behind by the original White House tax cut proposal.

Not making enough even to pay income taxes, many poor working families would have received nothing from the big tax cut, even though they pay payroll and other taxes. It’s clear that they need more support than the top 1 percent of America’s income earners and taxpayers—the ones who benefited the most from this tax cut. The tax cut increases the child tax credit from $500 to $1,000 over several years—a good pro-family initiative. But a single working mother with two kids making $24,000 per year would have received absolutely no help in the White House plan. By making the child tax credit partially refundable—like a tax rebate—now she does.

The refundable child tax credit will reach nearly 17 million low-income children, and help lift 500,000 children out of poverty, according to the Children’s Defense Fund, who helped lead the fight for it. But it really was a fight.

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Sojourners Magazine July-August 2001
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