Taxation
In a nation where 12.6 million children go to bed hungry, where 45 million are without healthcare, where the working poor cannot make ends meet, where millions cannot afford necessary prescription drugs, where the future marked by an aging population demands that we strengthen our Social Security and Medicare programs and where we have huge budget deficits far into the future, how do we in justice determine tax policies and priorities?
Most fundamentally, NETWORK believes that tax revenues must be sufficient to provide the necessary conditions for the common good. This collective responsibility must be distributed according to the ability to pay.
The Catholic Social Teaching principles of progressivity and distributive justice underlie the Catholic understanding of just taxation. Economic Justice for All, by the U.S. Catholic Bishops, states: “The tax system should be structured according to the principle of progressivity so that those with relatively greater financial resources pay a higher rate of taxation”. (#202)
Distributive justice refers to the relationship between society (the state) and the individual. It states that the goods and burdens of society should be distributed according to one’s need and one’s ability to contribute. The disbursement of tax monies should be applied to programs in a way that benefits those most in need, and the collection of taxes should come from those most able to pay. The principles of social justice direct us to the priority of caring for those who are poor and vulnerable in our society.
A Just Tax System
- Raises adequate revenues to pay for the public needs of society.
Taxes must raise enough revenue to promote the common welfare of the nation by enabling payment of current expenses and interest on debts from the past, as well as providing funds for future needs. - Is progressive.
People with greater financial resources pay a higher rate of taxes while the rate of middle and lower income people is at levels proportionate to their income. Those at or below the poverty line are exempt from income taxes. Taxes levied at the same rate for all people are considered regressive in that they place a proportionately higher tax on those with lower incomes. - Offers incentives for behavior which clearly benefits the common good.
These would be things such as tax credits for hiring those who are disadvantaged, education of low-income youth, home mortgages for low and middle income families. - Redistributes wealth to make a more equitable society.
The foundation of distributive justice is the redistribution of income from those who are wealthy to those who are less wealthy. This is accomplished through the levying of progressive taxes and includes incentives that benefit the common good. - Does not tax the income of those living below the official poverty line.
Those who are struggling to provide for their most basic economic needs are exempt from paying federal income taxes and receive credits for taxes they have paid (i.e. payroll taxes.) - Is efficient and simple to administer.
Loopholes are eliminated and all pay their fair share. The complexities of the system are reduced.
Learn More:
NETWORK on Taxes
NETWORK on the Estate Tax
USCCB on Budget & Taxes
Tax Policy Center
A joint project by The Brookings and Urban Institutes, the Tax Policy Center provides timely, accessible analysis and facts about tax policy to policymakers, journalists, citizens, and researchers. Check out their 2008 Election site for comprehensive look at the presidential candidates’ tax policy proposals.
The Tax Foundation
The Tax Foundation is a nonpartisan tax research group whose research is guided by the following principles: Simplicity, Transparency, Stability, Neutrality, and Growth-Promotion. The Tax Foundation provides research and analysis of current tax policy and tax policy proposals. Check out the Presidential Tax Comparison for a comprehensive look at the candidates’ tax policy proposals.
