Tuesday, March 9, 2010

WHO SHOULD PAY INCOME TAXES?

What percentage of American adults do not pay income taxes? In 2006 it was 40%. This year it will be 43% and next year it will be 49%.

I do not think the very poor should pay taxes but, this concerns me. We are getting perilously close to a tipping point where 51% are saying to 49%, “You pay the bills, friend.” (Another 11% pay less than a thousand dollars per year.) In Federalist Paper 10 James Madison expressed concern about the violence that the majority could force upon the minority. Alexis de Tocqueville called it “tyranny of the majority.” But common sense alone seems to suggest that a majority of nontaxpaying citizens should not be allowed to tax the minority.

When polled, 66% of Americans said that everyone should have at least some tax liability.

As a Christian, I surely do not want to impose difficult taxes on the very poor. But my inclination is to establish some minimal income tax so that at least 70% or 80% of our adults pay something.

On the other hand, if I were supporting my family on $30,000 per year and someone came to me and said, “Good news. Your tax burden is only $300,” I think I would respond by saying, “Where am I going to get $300?”

Scripture seems to tug us in both directions. Lev. 14:21 talks about the required offerings for cleansing of lepers. If the leper is poor, the offering is reduced. Lev. 27:8 also talks about a price reduction for the poor. In both of these cases the obligation of the poor is reduced but not eliminated.

The Bible also sites times when debts are forgiven, for the poor and nonpoor alike (Dt 15:1,2.) Also owners of vineyards and fields are to leave food for the poor. My research was not exhaustive, but it is interesting that I did not find instances where Scripture gave total relief to the poor regarding institutional obligations, such as offerings or taxes. Nonetheless concern for the poor permeates Scripture. In Dt 24:12, 13 we are instructed that if we give a loan to a poor person, and he gives his cloak as collateral, but he needs that garment for comfort, then we are to return the cloak to the borrower.

We do not want to be insensitive to the poor, but all things considered, I think more than 51% of us need to pay some income taxes. As Christians, though, we need to be careful that we reflect God’s compassion for the poor.

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Most of the data for this post comes from two sources.
1) An interview with Arthur Brooks in World Magazine, Jan 16, 2010.
2) An article in the Wall Street Journal by Adam Lerrick, Oct. 22, 2008.

4 comments:

  1. Stan, do you find a scriptural basis for the government taking up a tax to care for the poor? Or is it more scriptural that the CHURCH ( not a denomination) should be caring for the poor?

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  2. It is difficult to say because there is much in the Old Testament about helping the poor - and during much of the Old Testament era the church (Israel) and the State were the same thing.

    The book The Tragedy of American Compassion (by Marvin Olasky) documents conclusively that in the early decades of the United States assistance to the poor was handled by the church. But that gave way to the state in the 1800s and the poor are vastly worse off because of it.

    So my argument for the church doing it would be based on practicality and history, not Scripture.

    Of course many would say that the church does not do it so the state must. But that is not how it happened. Olasky's book clearly shows that the church was doing it. The nineteenth century takeover by the state was due to political philosophies for bigger government, not due to ineffectiveness on the part of the church.

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  3. You should google Milton Friedman's Negative Income Tax.

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  4. Brian - this is weird - I had a brother named Bryan Shelley. Unfortunately recently passed away.

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Please keep comments courteous, regardless of your point of view. Also, I am quite busy so please, if I do not respond to your comment, do not think it is not appreciated.