Posted on 09/30/2003 7:58:18 AM PDT by EsclavoDeCristo
What Would Jesus Tax? Alabama's 'Tax and Accountability' Plan Defeated
By Leslie Carbone September 29, 2003
“I’ve spent a lot of time reading the New Testament,” says Alabama’s Republican governor Bob Riley, “and it has three philosophies: Love God, love each other, and take care of the least among you. It is immoral to charge somebody making $5,000 a year an income tax.”
Fair enough—but Riley, who hosts Bible classes at the state capitol in Montgomery, tried recently to do much more than cut the state’s income tax on low-income Alabamans. Riley broke a campaign promise to promote a “tax and accountability” plan that would have raised taxes by a record $1.2 billion over five years, eight times the largest tax increase in Alabama history. The plan was defeated on Tuesday, September 9, by a resounding 2 to 1 margin, with an unusually high 53 percent of voters turning out to cast their ballots.
Riley’s proposal, supported by the state’s teachers unions, included the following elements:
Increase the annual income level at which a family of four begins to pay state income taxes from $4,600 to $20,000 Eliminate the state tax deductions for federal income, Social Security, and Medicare taxes Increase the top income tax rate from 5 to 6 percent Increase the percentage of property value taxed to 100 percent, while lowering the property tax rate from 6.5 mills to 3.5 mills Apply the state’s 4 percent sales tax to labor charges for repair and installation services Increase the sales tax on motor vehicles from 2 to 2.5 percent Double state filing fees on deeds and mortgages The additional revenues would have been redistributed, largely in the form of increased education spending.
Riley traveled the state suggesting that passing his plan was the “Christian” thing to do, repeatedly urging Alabama voters to “take care of the least among you”.
Riley is absolutely right that Christians are commanded to care for those in need, but his reading of Scripture was selective and superficial at best, his understanding of economics shallow and short-sighted.
Riley’s plan would have hurt those he purported to help. Progressive tax policies, like the one Riley tried to push through, are economically and morally destructive. Championed by Karl Marx, the progressive income tax is intended to apply higher tax rates to people who earn more. In other words, it is a selective law that levies a kind of additional tax penalty against people for prospering – and it backfires badly.
Progressive taxation destroys jobs. According to a Beacon Hill Institute study commissioned by the Alabama Policy Institute, Riley’s plan would have eliminated 24,107 Alabama jobs in 2004 alone. Moreover, it would have caused a net 1.2 percent loss in projected employment for each of the next five years.
That’s because progressive taxes discourage productivity and inhibit economic growth. That translates into fewer available jobs for workers. Lower job availability also means lower wages for those who find and keep work. Wages are highest when many employers have to compete for few workers; they are lowest when many workers have to compete for few jobs. It’s lower- and middle-class families who suffer most. Although high tax rates are imposed upon the so-called wealthy, their real costs – fewer jobs, lower wages, slower growth – hit low income families the hardest.
But the economic harm of Riley’s proposal was only the tip of the iceberg. Progressive taxation is morally destructive because it seeks to overturn natural moral justice. God has established a natural order whereby good behavior generally reaps rewarding consequences and bad behavior generally reaps negative consequences. Hard work, delayed gratification (e.g. saving), and responsible risk-taking (e.g. investing) tend to reap rewards in the natural economy. Laziness, poor planning, and lack of discipline tend to bring suffering. Redistributionary fiscal policies, like Riley’s, seek to reverse both these natural outcomes. In so doing, they create perverse incentives and disincentives.
Progressive taxation undermines the pursuit of virtue because it casts suspicion on the positive behavior that creates wealth. It constitutes a kind of fine on prosperity. Just as government seizes the assets of drug dealers, it selectively seizes the fruits of the labor of hard-working, honest citizens who have prospered against the odds. In so doing, it stigmatizes prosperity and the virtues that produce it.
At the same time, progressive taxation encourages the vices that typically stand in the way of prosperity. By seizing the fruits of hard work, the state encourages laziness. By making immediate consumption cheaper than saving, the state discourages sacrifice and delayed gratification. This discouragement affirms the human temptation to seek immediate desires over long-term good.
Virtue carries natural rewards, including prosperity. It also brings less tangible benefits, such as greater freedom from worry, the trust and confidence of others, and self-respect. Virtues become habits when practiced regularly, building healthy families, healthy states, healthy nations. A state that treats the fruits of virtuous behavior as sinister is a state in moral peril because it lures its citizens toward the practice of vice rather than virtue. It inhibits people from modeling the behaviors that build character. This is especially true in welfare and low-income communities where many people who would like to work hard and climb up have few examples to guide them. Perversely, the resulting social down-spiral creates greater dependency on government by infantilizing the citizenry, teaching people that they can’t make it on their own without a government handicap.
Herein lies another flaw in Riley’s proposal. The governor confused Christian personal duty with government function. Christians are to provide for the poor, and we are to do so personally. Redistributionary fiscal policy puts the state between the Christian and those for whom he is commanded to care. In so doing, the state sucks the life’s blood from such care. Material support is important. But, to be truly life-changing, it must be given in the context of a personal relationship that addresses the spiritual and emotional needs of both giver and recipient. Invoking the Name of Jesus as moral cover for handing somebody money via a faceless bureaucracy cheapens Christ’s life and message. Moreover, it teaches the recipient to depend on government rather than God. As any Christian providing material assistance to others should always make clear, he is giving in the Name of Jesus. Government seizes from Christians and non-Christians to give in its own name. Ironically, such government-mediated giving sanctions moral slackness among the coerced contributors, as it provides an artificial moral cover for those who do not become personally involved in the lives of people in need.
The Apostle Peter wrote, “[G]overnors … are sent by Him [God] for the punishment of evildoers and for the praise of those who do good.” (I Peter 2:14) Progressive taxation perverts the biblical function of government.
Alabama’s resounding rejection of Riley’s scheme to further pervert the function of government and injure the poor in one fell swoop is a welcome victory for morality and justice.
Faced with such a decisive defeat, Riley has shown a Christian maturity refreshing these days. “The people of Alabama said they want accountability, they want honesty, and they want trust. We’re going to give them that,” he said the night of the vote.
According to a spokesman, Riley sees “an opportunity to show even more leadership”.
Perhaps the best step Riley can take to strengthen his leadership is to rethink his vision for Alabama. Riley has repeatedly lamented Alabama’s last-place and near-last-place rankings across a panorama of social wellness indicators and noted, “So many people are dependent upon this state for their very existence.” Instead of imposing progressive taxation, which diminishes wealth and increases dependency, Riley should pursue policies – like lower taxes -- that can actually lift Alabamans out of poverty and into prosperity – economically and morally.
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Leslie Carbone is the author of Slaying Leviathan: The Moral Case for Tax Reform (forthcoming).
If 10% is good enough for God, it is good enough for the government
Frankly, if 10% was my total tax burden (federal, state, local, etc.), I think I might be alright with that. It would be a heck of alot better than the % I am paying now.
Fine.
Now that we have established that taxing income is immoral, everything else is simply a matter of degree!
Mrs VS
"It is immoral to charge somebody making $5,000 a year an income tax."
Now that we have established that, why an income tax at all?
- It is fairer to tax people on what they extract from the economy, as roughly measured by their consumption, than to tax them on what they produce for the economy, as roughly measured by their income.
The Primary Intent of the individual income tax is for political and social control not revenue collection. The Individual Income tax is maintained to establish and hold every person in the country perpetual legal jeopardy. That is a situation that must end with the repeal of the income tax from the statutes, and the prohibition of its use by Constitutional amendment that future generations will not face the same manner of manipulation and interference in their lives.
There was good reason why Karl Marx and the Communist Party made the progressive/graduated income tax the 2nd plank of the Manifesto of the Communist Party, by Karl Marx and Frederick Engels, published in 1848. We should never forget nor overlook the philosophical underpinnings of that choice:
"The proletariat will use its political supremacy to wrest, by degree, all capital from the bourgeoisie, to centralize all instruments of production in the hands of the state ... . Of course, in the beginning, this cannot be effected except by means of despotic inroads on the rights of property ... . These measures will, of course, be different in different countries. Nevertheless, in most advanced countries, the following will be pretty generally applicable.
1. Abolition of property in land and application of all rents of land to public purposes.
2. A heavy progressive or graduated income tax.
3. Abolition of all rights of inheritance.
4. Confiscation of the property of all emigrants and rebels.
5. Centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly.
6. Centralization of the means of communication and transport in he hands of the state.
7. Extension of factories and instruments of production owned by the state; the bringing into cultivation of waste lands, and the improvement of the soil generally in accordance with a common plan.
8. Equal obligation of all to work. Establishment of industrial armies, especially for agriculture.
9. Combination of agriculture with manufacturing industries; gradual abolition of all the distinction between town and country by a more equable distribution of the populace over the country.
10. Free education for all children in public schools. Abolition of children's factory labor in its present form. Combination of education with industrial production, etc. "
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