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.

SCRIPTURE AND POVERTY

Most Christians study Scripture from time to time. Usually the study focuses on a verse, a word, or a chapter, but on occasion, it could be an entire book. Sometimes believers need to look at God’s Word from 30,000 feet. We need to get the big picture.

When we do this, we see things like: God is extraordinarily patient with his people.

Another theme we observe from the broad view is that God cares passionately about poor people. This theme is everywhere in the Bible, both old and new testaments. Because it is so prevalent in Scripture, this subject, which obviously relates to economics, will often be a part of this blog.

I will often differentiate between two types of poverty. (1)Poverty in the United States is one thing. (2)Extreme poverty in developing countries is quite a different thing. (see NOTE 1) Those suffering from extreme poverty often live on a few dollars per day for an entire household. They sometimes go to bed hungry. Even if they are fed for a day, they do not know where tomorrow’s food will come from. Their health options are minimal and sometimes they endure terrible injustices at the hands of governments or powerful people.

Poverty in the U. S. is different. 97% of the U. S. poor have at least one color TV in the home. Two or more cars are owned by 30% of American poor households. 76% of poor households have air conditioning. PLEASE do not misunderstand me. I am not being cynical and implying that these folks are not really poor. They are poor. I would not want to change places with them for one day. My point is that American poverty and extreme world poverty are two different things. As I write future blog posts I will often make it clear that I am speaking of one or the other.

According to the World Bank, one in two people living in developing world countries in 1981 were living in extreme poverty. By 2005 that ratio had dropped to one in four. (see NOTE 2) Most of the improvement came in Asian countries where free market capitalism boosted the economy at a rapid rate. When economies prosper, poverty diminishes and nothing makes economies boom like capitalism. There are a number of evils that are often blamed on capitalism and I will take them up in future blogs.

Some authors aptly describe a problem, but their solutions might be wrongheaded. (see NOTE 3) So it is with Ron Sider. His book Rich Christians in an Age of Hunger does a marvelous job of showing how dire worldwide poverty is, even though his solutions can be, and often are, criticized.

For now we can be pleased that extreme poverty is declining. Nonetheless there are still 1.4 billion people in developing countries living in extreme poverty. That is a staggering number that should move the heart of every Christian.

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WE ARE ALL BUSY so I will try to keep my posts short. After a post I may have NOTES for those that are interested in a bit more detail.

NOTE 1. Extreme poverty is often referred to by that name, “extreme poverty,” so I will do likewise. I will try to think of a name to describe the type of poverty we have in the United States. Nonextreme poverty does not sound good because it seems to minimize the suffering of those people. I am open to suggestions for a name for that group.

NOTE 2. World Bank data is from this world bank web article:
http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTRESEARCH/0,,contentMDK:21882162~pagePK:64165401~piPK:64165026~theSitePK:469382,00.html


NOTE 3. Another example of this phenomenon is Ayn Rand. Her novels show the sad effects of stifling individuality and freedom. But her solution, called objectivism, is horribly selfish and inappropriate for Christians.