By this time most of us have completed a major civic duty for the year 2014: we’ve filed our income tax returns. We’ve paid our individual and family shares into the cost of living together in the community of Iowa and the larger community of the United States.
Those state and federal tax forms don’t cover all costs: there are sales taxes, excise taxes, fees, corporate taxes, estate taxes and more. All go into the payment side of our citizenship ledger. But we generally use the personal income tax as a symbol of that whole system — and are too often encouraged to think of it in two unfortunate ways: as a burden to be lightened as much as possible and as a game whose rules are to be stretched and manipulated as much as possible.
Catholic teaching on justice is different. We see life not as a collection of individuals circulating like unconnected atoms, but as a body with all parts connected in dynamic interrelationships. In the biblical vision of reality, the whole body is affected, along with all of its parts, by what happens in any part. “If one part suffers, all the parts suffer with it,” St. Paul says (1Cor.12:26). “The eye cannot say to the hand, ‘I do not need you,’ nor again the head to the feet, ‘I do not need you’” (1Cor.12:21).
For Paul and for us, human life is all about being connected: noticing, welcoming and nurturing connections just as the physical body is healthiest when its parts are relating fully. We tend to glory in our relatedness. Serving it is like serving ourselves: satisfaction as much as duty.
It is difficult, though, to relate well without trust. And our American civic, political body, fed by the tax system circulating through it, can be so dense and complex that we begin to wonder: can it be trusted? Is it fair?
The size and complexity of the federal tax code in particular has been described as “obscene.” Even experts can’t know for sure that everything in their tax return is done properly. We long for a system simple enough to understand yet appropriate for the variety in our society.
Here is a possible beginning for thinking about a fair income tax:
Since we are a large society with some important regional differences, begin by distinguishing regional variations in income: Iowa is not Silicon Valley; Appalachia is not New York. Find the median income for regions as their base and determine the cost of a moderate lifestyle providing all necessities. That would be pegged as the living income in that region.
All income of every type and from every source would be subject to a progressive tax, but no income up to the living income amount would be taxed. As an example, Iowa’s living income might be $50,000 for a family of four while New York City’s might be $100,000. Everything above those amounts would be taxed at a progressive rate, including the $26.7 billion in bonuses paid by Wall Street firms in 2013. In this way we might cut the drift to oligarchy in this country and get back to building a sturdy, confident middle class.
In 1960, 33.5 percent of all income, including wages and investment returns, went to the top 10 percent of earners. Currently, 48 percent goes to the top 10 percent. This trend can’t continue if we want a healthy society.
No doubt there are other, better ideas for improving the way we share costs for our common good. They should be laid out, talked about, studied. More of us should think about greater justice in our tax system and add our voices to political debates. Make this a respectable, even desirable, topic of conversation. The Catholic tradition makes care for the community a primary duty, and this is a way to express such care.