Our faith calls us to work and pray for a society where all God’s people enjoy the fullness of life that is God’s vision for each one of us. In today’s world, a just and faithful society depends upon a fair tax system. Our federal tax code has many beneficial features but it also stands in need of reform. A good tax system reflects our values. It raises sufficient revenue for society’s needs, is progressive (falling more heavily on those with higher incomes), and eliminates loopholes and other possibilities for tax avoidance.
Commentary: Not This Tax Reform
November 09, 2017
As Congress takes up a long-promised bill to reform our federal taxes, we are once again thrust into a very loud, very confusing conversation that will undoubtedly produce more heat than light.
Articles and Reports
A Tidal Wave of Corporate Migrants Seeking (Tax) Shelter by Andrew Ross Sorkin, New York Times, January 26, 2016. Johnson Controls, an auto parts supplier recused in the $80 billion bailout of the auto industry during the Great Recession, is now merging with a smaller firm, Tyco, based in Ireland, in a move to cut taxes. Also see Tyco Merger Will Shift Tax Liability Overseas by Leslie Picker, New York Times, January 26, 2016. More about the Tyco merger.
By Molding Tax System, Wealthiest Save Billions by Noam Scheiber and Patricia Cohen, New York Times, Dec. 30, 2015
Businesses Are Winning Cat-and-Mouse Tax Game by David Gelles, New York Times, August 28, 2014. Corporations are finding new ways to avoid paying taxes. Taxes revenues from corporations are flat even as corporate profits skyrocket.
Bill Moyers interviews Nobel-prize winning economist Joseph Stiglitz about taxes, inequality, and fairness.
Nobel prize winning economist Joseph Stiglitz recently appeared on Moyers and Company talking about tax reform and inequality. The two-part series was very informative and hard hitting. Part 1: Stop subsidizing tax dodgers and Part 2: How tax reform can save the middle class are each 22 minutes in length.
Also read Stiglitz's Reforming Taxation to Promote Growth and Equity. The goal of tax reform, Stiglitz writes, is to advance multiple social goals (in addition to raising more money): higher employment and faster economic growth, a fairer distribution of income, and less environmental degradation. The paper describes the changes in tax law that would accomplish these goals.
Tax Day: April 15
A day to celebrate, lament, and (most of all) make a commitment to tax justice. Tax Day finds many of us with conflicted feelings about paying our taxes, with reasons to celebrate and to lament. May it also be a day when we make a commitment to work for tax fairness: everyone paying their fair share for programs and services that serve the common good and create a world where all God’s people and creation live in the fullness of life.
Tax Reform -- Recent Studies
Citizens for Tax Justice (on whose board sits your Minister for Economic Justice) has just released two important new reports.
- One study examines a package of tax reforms proposed by Congressman Dave Camp, chairman of the House Ways and Means Committee. CTJ's assessment of Camp's proposal shows it includes none of the desirable reforms listed in the UCC General Synod's Resolution on Taxes (see just below) but instead suggests changes that, in many cases, acutally move in the opposite direction from the desired reforms
- In a second study, The Sorry State of Corporate Taxes, CTJ finds that among 288 Fortune 500 corporations over the five year period 2008-2011, 111 of the companies had at least one year in which their federal income tax was zero or less. Moreover, 26 companies -- including Boeing, General Electric, Priceline.com and Verizon -- paid no federal income tax rates over the entire five-year period, despite combined pre-tax profits of $170 billion.
A 2013 General Synod Resolution on Taxes
In 2013, the UCC General Synod approved a resolution calling for a number of changes in the tax code including:
- a financial transaction tax to reduce financial speculation;
- taxes on capital gains and “carried interest” (income earned by hedge fund managers that is currently taxed at the rate of capital gains) that match those levied on wages and salaries;
- a strong estate tax to reduce the transfer of massive wealth across generations;
- reform of the corporate income tax to 1) boost revenue, 2) close loopholes and stop the use of tax havens, and 3) end incentives that encourage corporations to move jobs offshore; and
- a tax system that is progressive, fair, neutral, adequate, and redistributive
More information on each of these proposed reforms is included in the resolution and the paper described just below, The Tax System: A Matter of Faith, Fairness, and Flourishing Communities.
General Synod also called upon national staff to explore the effectiveness and implications of carbon taxes to reduce greenhouse gas emissions.
Read the entire text of the Resolution, Advocating for Tax Reform as Christian Stewardship and Public Duty
The Tax System: A Matter of Faith, Fairness, and Flourishing Communities pdf includes endnotes [615 KB]
This resouce from Justice and Witness Ministries reviews many of the troubling features of our current tax system and lays out alternatives and reforms.
Many serious problems plague the country today: the many poor and near-poor families who fail to receive the financial support they need and the opportunities they deserve; the severe shortage of good jobs; the unaffordable cost of higher education; the millions of people who lack health insurance; the roads and bridges that are crumbling; and the high level of income inequality. While multiple factors contribute to these problems, our flawed tax system plays an important role.
Religious and community organizations struggle to meet the needs of the many people who lack food, shelter, health care, jobs, and other essentials. But these faithful efforts inevitably fall short. The needs are just too great. In a nation of 310 million people and a world of nearly seven billion, only government – of, for, and by the people – has the potential to raise sufficient resources and put in place the structures and institutions that can fill our unmet needs and provide for the common good. Taxes pay for a social safety net that supports us when we cannot support ourselves. Taxes fund avenues of opportunity by paying for education, health care, training programs, childcare, and early childhood education. Taxes strategically assessed can encourage desirable behaviors and discourage undesirable ones. Taxes pay for goods and services that promote the common good. A good tax system is essential for an equitable and well-functioning society.
For the government to do its work successfully it needs adequate resources. But during the last few years, federal revenues, measured as a share of national income, have been lower than at any time since 1950. More revenue is needed; taxes must be raised. The tax system must also be fair. For many people of faith this means a “progressive” tax system that places tax obligations on taxpayers in accordance with their ability to pay. Individuals with higher incomes are taxed at higher rates than those with lower incomes. A good tax system raises sufficient revenue for society’s needs, is progressive, and eliminates loopholes and other possibilities for tax avoidance.
This four-page paper describes a number of current problems with our tax system including those mentioned in the Synod resolution, and suggests ways the problems can be addressed. More