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“Give me neither poverty nor riches, but my daily bread. For if I have too little I may steal and dishonor God, and if I have too much I will say, ‘Who is God? I don’t need God.’”
Getting Real About Taxes As arguments about the expiration of the socalled Bush tax cuts heat up yet again, I’d like for us to look at some hard numbers and imbibe some crisp, cool theology. First, the numbers: A September 2012 report by the Congressional Research Service* found that lower tax rates for the wealthiest (the top 0.1 percent and the top 0.01 percent) correlates with wider income and wealth disparity. In the concluding remarks, the report states: The results of the analysis suggest that changes over the past 65 years in the top marginal tax rate and the top capital gains tax rate do not appear correlated with economic growth. The reduction in the top tax rates appears to be uncorrelated with saving, investment, and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie. However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution. It is simply untrue that tax cuts for the wealthiest create more jobs, income, and wealth for the middle class and working poor. Data since 1945 bears this out. The report further concludes: Throughout the late-1940s and 1950s, the top marginal tax rate was typically above 90 percent; today it is 35 percent. Additionally, the top capital gains tax rate was 25 percent
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in the 1950s and 1960s, 35 percent in the 1970s; today it is 15 percent. The average tax rate faced by the top 0.01 percent of taxpayers was above 40 percent until the mid-1980s; today it is below 25 percent. Tax rates affecting taxpayers at the top of the income distribution are currently at their lowest levels since the end of the Second World War…. As measured by IRS data, the share of income accruing to the top 0.1 percent [top tenth of one percent] of US families increased from 4.2 percent in 1945 to 12.3 percent by 2007. At the same time, the average tax rate paid by the top 0.1 percent fell from over 50 percent in 1945 to about 25 percent in 2009.
Tax policy does indeed have a relation to how the economic pie is sliced—lower top tax rates are associated with greater income disparities. Does God have an opinion about this? Christians are supposed to think so. I think God’s opinion is that the wealthiest should live more simply and that the poorest should have safe shelter, nutritious food, quality education, and accessible and affordable healthcare. In the Hebrew Scriptures, God’s prophets tell kings and rich people not to gather so much wealth into multiple barns, palaces, and fields but to redistribute it. Redistribute it? Yes! The biblical Jubilee teaching requires a redistribution of land every 50 years so that some families do not get exceedingly wealthy while others remain desolately
poor. Society had a system that prevented extremes, balancing wealth so that more people had enough and fewer people suffered from extreme riches and extreme poverty. A powerful yet seemingly un-American proverb (30:8-9) is “Give me neither poverty nor riches, but my daily bread. For if I have too little I may steal and dishonor God, and if I have too much I will say, ‘Who is God? I don’t need God.’” Taxation is a system by which governments can help fulfill this wise proverb. God is on the side of the people who suffer, and people often suffer because systems are in place that allow low, non-livable wages and that allow the wealthiest to amass exorbitant wealth while not having to support to a sufficient degree the nation and citizens that enabled them to profit so much. Governments can tax the wealthiest at a higher rate and help them out by reducing exorbitant riches, and governments can provide safety nets for the poorest and education and healthcare for everyone. It can be done, and when it is done I think God is quite happy. And we should be too. *Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945 by Thomas L. Hungerford (Congressional Research Service; September 14, 2012; available at tinyurl.com/9uxatwn)
Paul Alexander is professor of Christian ethics and public policy at Eastern University’s Palmer Theological Seminary as well as director of public policy at the Sider Center on Ministry and Public Policy.