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My two (taxable) cents on God and taxes
A deal President Obama struck with Republican leaders last week will extend tax cuts across the board including, controversially, to the richest Americans.
Some politicians argue that religious values should be reflected in the public square. Should this faith-based view of politics be applied to the economy? Jesus said, "Whatever you did for one of these least brothers of mine, you did for me."
In a time of economic turmoil and record poverty levels, are tax cuts for the wealthy moral?
What follow are some very general thoughts about morality and taxation, numbered and cross-referenced like the Internal Revenue Code for enhanced readability. Critical feedback is welcome and appreciated.
A. Threshold issue - religion and morals should not mix
(1) Assuming the correctness of the clarification in subsection (a), as a threshold matter, religious faith should not be regarded as a reliable source of moral authority. Although people claim to know what is right or wrong based on divine revelation, there is a fundamental difference between knowing something and believing something, such that it may be impossible to know something based on divine revelation.
(a) By most accounts, God is inscrutable and beyond human comprehension, observation, or experimentation. Despite the best efforts of religious people to convert their unverifiable beliefs into unvarnished knowledge, it seems rather impossible to derive knowledge from things that cannot be known. On the other hand, it is not only possible but also less arbitrary to evaluate tax policies on the basis of more objective criteria, such as their relative tendencies to produce the most benefit for the most people.
B. Idealism vs. Pragmatism
(1) Subject to the reservations expressed in subsections (a)(i), (a)(ii), and (a)(iii), a flat income tax is personally appealing because it would simplify our unwieldy tax code, which is currently fraught with maddening loopholes and mind-numbing complexity.
(a) Notwithstanding the flat tax endorsement contained in the preceding paragraph:
(i) Academic research suggests that wealthy people are less inclined to make charitable contributions than those who are less fortunate. Income inequality appears to be a natural and necessary byproduct of a capitalist economy, and if government revenue dries up because of the adoption of a flat tax, there is no guarantee that wealthy individuals will supplement the efforts of government to build a social safety net.
(ii) There is anecdotal evidence from Warren Buffett that extremely wealthy individuals pay a lower effective tax rate than working class individuals, and there is additional IRS evidence that extremely wealthy individuals are subject to significantly lower average tax rates than two decades ago. What is offensive about these disparities--and what partly underlies the appeal of progressive taxation--is that extreme wealth is often derived not from work but rather by luck. There is popular wisdom to the effect that you need money to make money, and that you should not work for money but rather let money work for you. To the extent that hard work is a sign of personal virtue, it seems unfair to force a worker to pay a greater share of her hard-earned income than someone who does not have to work for their wealth.
(iii) In the current economic climate, given the practical impossibility of overhauling our tax code anytime soon, and given the urgent need to promote economic growth, which would be hampered if beleaguered individuals were subjected to a tax hike or cessation of unemployment benefits, maintaining current tax rates for the wealthy (in the short term) might be a small price to pay for securing the greatest good for the greatest number of people over the long term.
By
Rajdeep Singh
|
December 14, 2010; 3:49 PM ET
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Posted by: carollkm | December 16, 2010 2:46 PM
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All true, and all the BS about the wealthy giving more is just BS. The measure of giving is "disposable income" not gross income. The middle class person who gives $100 is making a much greater sacrifice than the super rich who donate $100 million and call press conference to note the event.
Posted by: jklfairwin | December 14, 2010 11:40 PM
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re:A
Was it ever proved that Morals and Economics do mix ? As a concurrent threshold issue, the answer would explain a lot.
Posted by: gannon_dick | December 14, 2010 10:32 PM
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Morals and economics must mix -- some kind of moral code must be the basis for an economic system -- both Socialism and Capitalism reflect their own moral codes.
Moral code doesn't have to be selected from one religion or another -- it simply forms the basis for a humane and just society. It will vary on a personal level, but still will be based on beliefs generally held in common.