What Would Jesus Tax?
In the face of state and federal budget cuts, many of us have been fasting and contemplating the question: “What would Jesus cut?“ In light of tax day, however, we might equally contemplate: “What would Jesus tax?”
After all, a great deal of our budgetary stress is the result of declining revenue, thanks to the economic downturn and decades of tax cuts.
A new report that I co-authored, “Unnecessary Austerity,” argues that before we make draconian budget cuts at the federal and state level, we should reverse huge tax cuts for the wealthy and tax dodging corporations.
|photo © 2011 John Morgan | more info (via: Wylio)|
The Jesus I know would be concerned about the extreme inequalities of wealth and power that have emerged in our communities. He would rail against principalities and powers that rig the tax rules so the privileged pay less.
He would lament the destruction of God’s creation through excessive consumption and pollution. And, he would be alarmed about financial and commodity speculation driving up the cost of food and worsening hunger. (In today’s world of high finance, someone would be hedging investments on how quickly Jesus could multiply loaves and fishes.)
In my recent Sojourners magazine article, “Taxes and the Common Good“, I argue that new “sin taxes” should focus on discouraging financial speculation and environmental destruction — while reducing the huge canyon between rich and poor. A good first step would be to reverse some of the more irresponsible tax breaks of the last generation.
When we hear our lawmakers lament that “we’re broke,” consider this fact: If corporations and households with $1 million income paid at the same levels they did in 1961, the Treasury would collect an additional $716 billion a year — or $7 trillion over a decade.
There are two important explanations behind our current budget “squeeze.” First, income and wealth have become extremely concentrated in the hands of the super wealthy. The richest 1 percent of households own more than 35.6 percent of all private wealth — approximately $20 trillion. The number of households with incomes exceeding $1 million has grown from 15,753 in 1961 to 361,000 today, adjusted for inflation. Meanwhile, the middle-class standard of living is collapsing and poverty rates are at a 15-year high.
Second, we’ve dramatically reduced taxes on the wealthiest households and global corporations. Congress and special interest lobbyists have made mincemeat of our tax code, losing hundreds of billions in revenue. Worse, lawmakers have averted their eyes as corporate lobbyists drill new tax loopholes and extract new corporate welfare subsidies.
That’s how a profitable company like General Electric legally and aggressively avoids taxes. Since 2006, General Electric has reported over $26 billion in profits, yet paid not one penny in U.S. taxes.
Other huge global companies such as Verizon, Boeing, ExxonMobil, and Federal Express also pay no or very low taxes. In his new book Treasure Islands, journalist Nicholas Shaxson describes how these artful tax dodgers use accounting gymnastics to move money to overseas tax havens like the Cayman Islands or Ireland. They pretend to earn their profits offshore and then report their paper losses here in the United States — reducing their responsibility to the commonweal.
Our “Unnecessary Austerity” report identifies over $4 trillion in potential revenue over the next decade. Closing offshore tax havens could generate an estimated $100 billion a year. Adding new top tax brackets for millionaires could generate another $60-80 billion. Instituting a financial transaction tax could generate $150 billion a year.
No doubt, we will need to reduce government expenditures in a responsible way. There are some farm subsidy programs and military expenditures I have on my list. But if our lens is entirely focused on the expenditure side of the equation, we’re going to miss a huge part of the solution. The prophetic Jesus would turn our head in another direction.
Chuck Collins is a senior scholar at the Institute for Policy Studies where he directs the Program on Inequality and the Common Good (www.inequality.org). He is co-author of The Moral Measure of the Economy and with Bill Gates Sr. of Wealth and Our Commonwealth: Why America Should Tax Accumulated Fortunes.