Bringing Chips to the Potluck: Taxation and Inequality in the American System

Everybody knows that guy…the guy that brings a bag of chips to the potluck. Don’t be that guy.

Why? Because everyone else at the potluck made their grandma’s famous German potato salad, called their uncle for his classic barbeque dry rub, or at least thoughtfully picked out the nicest-looking watermelon from the local grocery store. But not that guy. He brought nothing but a measly, rumpled bag of potato chips that he already had at home in his lavishly stocked pantry. It is not right, and it is not fair to everyone else who did their part to make the potluck a success. And if you have too many guys bringing chips, the potluck is not a success and the party is ruined.

Sadly this type of behavior is not only present in our social lives, but ingrained in the American tax system. As it stands today, many American taxpayers are paying a disproportionately large amount of the income they need to live a life that is fully compatible with human dignity—making sacrifices that have a real impact on their well-being—while an elite few are paying just a fraction of their excess. Economic inequality is growing, and it is threatening to shred the national fabric of our country.

Let’s look at the larger problem here. Here are some shock-value statistics that are, sadly, not that shocking anymore:

  • 1% of Americans have 40% of the nation’s wealth
  • In 1976, the richest 1% took home 9% of the nation’s income. In 2012, they took home 24%.
  • CEO’s make 380 times their average worker’s pay.
  • America has more inequality than any other nation with an advanced economy.

The chasm of income and wealth inequality in the United States is vast and ever-growing, and it might swallow us all if we aren’t careful. Top American corporations in the financial services sector are admitting that inequality is a threat to the U.S. economy. Standard and Poor says, “The current level of income inequality in the U.S. is dampening GDP growth, at a time when the world’s biggest economy is struggling to recover from the Great Recession and the government is in need of funds to support an aging population.”

What does this economic inequality mean for real people? It means some people are choosing between food and their diabetes medicine, while others are choosing between Venice and Prague.

People are increasingly realizing what a problem this inequality is. What some people don’t think about, however, is the role that taxes play in this mess.

Our dysfunctional tax system plays a critical role in perpetuating and increasing the wealth gap. This problem began decades ago and is in no small part due to the fact that taxation has become less progressive. The Bush tax cuts delivered massive savings for the richest Americans. But this shift can also be seen in the growing reliance on regressive and flat taxes. Whereas progressive taxes calculate the amount that people pay based on their ability to pay, regressive taxes take a larger portion of income from low-income families than high-income families. For example, regressive payroll taxes, which cost people with lower incomes much more proportionately than the wealthy, are projected to rise to about one-third of federal revenue in 2015.

Furthermore, the wealthiest 400 people in the United States have two-thirds of their wealth in the form of capital gains and dividends. The top 1% owns half of the country’s stocks, bonds, and mutual funds. However, these forms of income are taxed at 15%, a significantly lower rate than income-from-work, which is taxed at up to 35%.

Our tax system must be designed to serve the common good. But right now, it does not. How can it? The National Conference of Catholic Bishops drafted a document called Economic Justice for All, which outlines three principles toward creating a just tax system:

  • First, the tax system should raise adequate revenues to pay for the public needs of society, especially to meet the basic needs of the poor.
  • Second, 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. The inclusion of such a principle in tax policies is an important means of reducing the severe inequalities of income and wealth in the nation.
  • Third, families below the official poverty line should not be required to pay income taxes. Such families are, by definition, without sufficient resources to purchase the basic necessities of life. They should not be forced to bear the additional burden of paying income taxes.

Whether we like it or not, taxes are a matter of justice. As contentious and annoying as they might seem, taxes are necessary for the common good. This means that we shouldn’t think about taxes and say, “I worked hard for this money. It’s mine. Don’t take it from me.” Rather, we should contribute to the good of society based on how much we have to give and based on the needs of the community. And we should support tax policies that reflect this. Yes, you have probably worked really hard. And yes, you have earned that money. But we are called to share the gifts we have been given with those who do not have enough. That is the model of the early Christian communities, and the generosity, the caritas to which we are called today. This must shape our understanding of justice and push us to support a just system of taxation that serves all.

In other words, we shouldn’t be thinking about how we can bring the cheapest thing to the potluck and still eat like a king, particularly if we are living large at home, while others who took the time to make a quality contribution are struggling to make ends meet.

Gaudium et Spes, one of the four apostolic constitutions from Vatican II, said that “It is imperative that no one, out of indifference to the course of events or because of inertia, would indulge in a merely individualistic morality. The best way to fulfill one’s obligations of justice and love is to contribute to the common good according to one’s means and the needs of others, and also to promote and help public and private organizations devoted to bettering the conditions of life.”

Ladies and gentlemen, this means that we should be proud to pay our taxes! We should be proud that we are making a just contribution to the common good. We should be proud to share our favorite recipe at the potluck! We should be proud that we have done our part to make the potluck a success. We should be willing to do our part, and we should have tax-payer pride! (#taxpayerpride)

Last year, Pope Francis said, “Poverty in the world is a scandal. In a world where there is so much wealth, so many resources to feed everyone, it is unfathomable that there are so many hungry children, that there are so many children without an education, so many poor persons. Poverty today is a cry.”

Poverty is a cry, Pope Francis says. It is a cry for a more just tax system, a system that asks us each to bring our best to the potluck, not just that crummy bag of chips.

Allison Walter is the policy education associate for NETWORK, a national Catholic social justice lobby.


Around the Web (Part 2)

Check out these recent articles from around the web:

Economic Inequality: Can Theology Say Something New? by Kate Ward: “In my view, a good deal of advocacy around inequality, including that of religious leaders, avoids one of the more important questions we should be asking: how does inequality affect our moral formation? For many of us, it’s easy to find common cause with those who are like us and more difficult to feel empathy for others who we may perceive as more distant. This adds urgency to the question of whether it matters if, for example, a CEO earns 100 times or 100,000 times what her lowest-paid employees do, even supposing the employees earn a living wage. Do we really think vastly different living standards have no impact on our ability to form solidarity with one another?”

In Lebanon, Syrian refu­gee children find safety from war but new dangers on the streets by Loveday Morris: “The United Nations announced that Lebanon registered its millionth Syrian refugee on Thursday, making the tiny country — which had a population of just over 4 million before the Syrian war — home to the highest concentration of refugees in the world. Among the most visible representatives of that influx and the impact of the Syrian war on Lebanon’s capital are children such as Mohammed, who fled the violence and ended up here, selling flowers, tissues, chewing gum or shoeshines on the streets of Beirut.”

Finding ‘Mercy’ in daily life by Gail Finke: “Yes, it’s funny (“In which I get locked out of the church while trying to help people into it”) and sad and thought-provoking and inspirational. If you take even one thing away from this book, you’ll be a better person and a better Catholic. But you’ll take away a lot more than one.”

On Coates v. Chait by Ross Douthat: “You don’t have to regard morality as at the seat of all our troubles to recognize that it’s intertwined with some of them; you don’t have to write off public policy to concede that there are ills that policy alone can’t solve; you don’t have to ignore structural disadvantages to recognize the importance of asserting individual agency — saying ”there are things under our control that we’ve got to attend to …,” as the president has put it — in the face of collective difficulty.”

Facts, Propaganda and Libertarianism by Michael Sean Winters: “Any thoughtful Catholic has sufficient difficulties with liberalism, all of which tend to wish it were less individualistic, less focused on human autonomy, less redolent of rights apart from correlative responsibilities. Libertarianism wants to pull liberalism in the opposite direction, removing even the few checks on unfettered license that liberalism supplies.”

Shifting the Focus: Objectification, Porn and the Longing for Belonging by Leah Perrault: “Objectification and depersonalization are natural consequences of porn, but I don’t think that the average porn user, at least at the beginning, is aiming for those consequences as a primary goal. The appeal of porn, and eventually the compulsion or addiction, isn’t about the (often female) body, person or sexual appeal. It’s about the longing, fear and/or compulsion in the viewer.”

Opinion: Forget Ukraine, Syria is now the world’s biggest threat by Simon Tisdal: “Al-Assad’s continued survival as Syria’s head of state is an egregious affront to the U.N. Security Council and its various related Syria resolutions, to the U.N. charter, to international law, and specifically to international war crimes legislation. Al-Assad stands accused of war crimes and crimes against humanity, not least over the use by his forces of chemical weapons against civilian populations. But once again, nothing much is done, and the credibility of such institutions and laws suffers as a result. The moral example set by such dereliction is shocking.”

To prevent another Rwanda, all it takes is a few well-trained troops by David Blair: “Gen Dallaire’s searing memoir of those 100 blood-soaked days, Shake Hands with the Devil, contains a lesson of eternal relevance. This distinguished Canadian soldier offers his professional assessment that a mere 4,000 trained troops, entrusted with a mandate allowing the use of force to protect civilians, could have stopped the genocide in its tracks. For want of a handful of soldiers, 800,000 people died.”

Crisis and Need in the Central African Republic by Allen Ottaro: “Father Mombe shared an overview of the history of the conflict in his country, efforts by churches and faith communities to end the violence and initiate reconciliation, and his personal experience of the conflict in the capital city, Bangui, in December 2013.”


How You Can Address Income Inequality and Poverty

Recently the USCCB posted this presentation on income inequality. I thought it was a great place to start on raising awareness about how wage inequality impacts people who are living in poverty in this country. It’s a major problem but it doesn’t have any simple solutions, and the presentation doesn’t really offer any. The complexity of the situation has been weighing heavily on my heart because the Congressional Budget Office (CBO) report that came out recently indicated that:

● The higher minimum wage would reduce jobs by about 500,000, or 0.3 percent of projected 2016 employment. The CBO admits that its estimates involve much uncertainty. Job loss, it says, might be as high as 1 million or as low as almost nothing. The half-million figure is its best judgment.

● Up to 25 million workers would receive wage increases, about 16.5 million below the proposed minimum and possibly 8 million more just above it. Wage increases would raise the incomes of families in poverty by about 3 percent, or $300 annually. The effect is muted because most people in poverty don’t have jobs and many low-income workers are part-time (47 percent).

●Higher incomes would lift about 900,000 people above the government’s poverty line in 2016 ($24,100 for a family of four). That’s about 2 percent of the projected 45 million poor.

A higher minimum wage would help a lot of people, but it could also hurt a number of people too, and it certainly isn’t a final solution to the problem of poverty in the USA. The situation can’t be reduced to one simple step. Hunger and poverty are complex issues, and if we are going to end them (which I hope we all would love to see) it’s going to take a lot of work on a lot of different fronts. What the USCCB presentation does is highlight the historical, theological, and statistical reasons why we should CARE about income inequality. Great job! I care about it, but now what should I do?

How can income inequality best be addressed and what changes might be put into place within a wider series of reforms?

I have recently been reading the new “Hunger Report” on “Ending Hunger in America.” It’s 250 pages long, but a faithful and fruitful discussion on the issues of hunger in America is presented in it. It addresses income inequality, jobs, local leadership, and national policy. It also takes the time to look at those on the margins who are often left out, excluded, and denied access to the programs, jobs, and services that can keep them secure. I highly recommend taking a look at it.  Each component in addressing poverty is complex and essential, and requires people who are willing to address the issues in their complexity.

As Catholics I believe we are all called to take action with our time, voice, and resources to make an impact in our communities. We should take time to talk and learn about poverty. We should take time to speak up about poverty to our friends and, more importantly, to our policy makers. We should take time to pray about poverty. We should take time to serve those in poverty. We should use our resources to support those in poverty.

I believe that income inequality is a crisis that will only grow if we don’t address it. It’s part of a larger problem of poverty in our nation. To fix it will take some difficult decisions, and actions like raising the minimum wage are certainly an essential part of it. More importantly, though, it also requires people who are willing to make difficult decision in their own lives to address it. As we approach Lent I encourage you to think about some ways that you can impact poverty as part of your spiritual practice this season.

Here are a few ideas:

  1. Connect your fast to Justice! I recently posted 5 creative fasting ideas that can help connect what you give up for Lent to the trials of those in poverty.
  2. Make letter-writing a spiritual practice. This is something I recently encouraged over at Bread for the World. Letters can comfort the grieving, embrace the lonely, uplift the discouraged, and carry love across the globe. A letter can also affect the lives of people you may not even know. Writing to your policy makers in Washington, D.C., can influence the decisions they make—decisions that affect millions of people both here at home and around the world.
  3. Give a little extra. Budgets are moral documents. They indicate what we value. Take a look at yours and evaluate if you can make a sacrifice anywhere so that you can help others who are struggling.
  4. Take time to pray about these issues. As we connect with God’s heart for justice, our own lives find strength and inspiration. Consider making issues of poverty a topic for prayer and contemplation. You might also consider taking a group though a time of prayer and study together. I am hoping to use this guide with my family this year. 

I pray God will bless you this Lent, and that you will be led into the heart of our just God and his love for all people.



Around the Web

Check out these recent articles from around the web:

Truth and Truthiness by Patrick Manning: “If we want our students to seek Christ with their whole selves, we must engage them in the fullness of their being—heart, mind and will. St. Augustine long ago offered a formula for doing just this: delight the heart, instruct the mind, persuade the will. Stephen Colbert has demonstrated that this formula is still effective in our own time.”

The Art of Presence by David Brooks: “We have a tendency, especially in an achievement-oriented culture, to want to solve problems and repair brokenness — to propose, plan, fix, interpret, explain and solve. But what seems to be needed here is the art of presence — to perform tasks without trying to control or alter the elemental situation.”

I Have Seen the Future of the Republican Party, and It Is George W. Bush by Jonathan Chait: “A Republican Party that reprises the Bush era was a grim and unfathomable prospect in 2008, and is not exactly palatable now. But in the wake of the party’s thrall to Ayn Rand and Rand Paul and Paul Ryan, a return to Bushism sounds almost comforting.”

Number of Darfur’s Displaced Surged in 2013 by NY Times: “An estimated 400,000 people fled violence afflicting the Darfur region of Sudan last year, more than the number of those displaced in the previous two years combined, the top United Nations peacekeeping official said Thursday in an appraisal that suggested the decade-old conflict there had taken a turn for the worse.”

The Populist Imperative by Paul Krugman: “A new Pew poll finds an overwhelming majority of Americans — and 45 percent of Republicans! — supporting government action to reduce inequality, with a smaller but still substantial majority favoring taxing the rich to aid the poor. And this is true even though most Americans don’t realize just how unequally wealth really is distributed.”

Silence, Outsider: The Catholic Internet, Donatism, and the Medicine of the Eucharistic Life by Timothy O’Malley: “The Catholic conversation presently operating on the internet tends toward its own self-confident (even prideful) Donatism.   There are communities of Catholics online who stand above the Church and articulate criteria that they believe essential to being Catholic.   They then apply these criteria (apart from the actual, existing Church of bishops and councils and the sensus fidelium) to universities, to parishes, to priests or bishops or popes whom they find do not conform to such criteria.”

Supporting the Euromaidan Movement in Ukraine by Cardinal Timothy Dolan: “We Catholics in the United States cannot let these brave Ukrainians, whose allegiance to their religious convictions has survived ‘dungeon, fire, and sword,’ languish.  They deserve our voices and our prayers.”

What presidents really believe about God by Michael Beschloss: “Lady Bird Johnson told me decades later that her husband had found such comfort in the Catholic Church and ‘Luci’s little monks’ that she had once thought it only a matter of time before LBJ became a converted Catholic himself.”

‘Cold call’ pope strikes again by John Allen: “One more was added to the record Friday, as the Italian paper Corriere della Sera reported that Francis called an Italian woman named Filomena Claps on Monday evening, reaching her at her husband’s bedside in a hospital in the city of Potenza.”

More Imperfect Unions by Ross Douthat: “So one hypothetical middle ground on marriage promotion might involve wage subsidies and modest limits on unilateral divorce, or a jobs program and a second-trimester abortion ban.”

It’s cardinal v. cardinal on divorced and remarried Catholics by John Allen: “A rift has seemingly opened between two cardinals with significant Vatican influence, as the head of the pope’s Council of Cardinals has suggested that the Vatican’s doctrinal czar needs to be more ‘flexible’ in his views on divorced and remarried Catholics.”

Greed Is Not Good: The Social Usefulness of Progressive Public Policy by Charles Reid Jr.: “Progressives must never abandon appeals to fairness and concern for the vulnerable when advocating on behalf of sound public policies. But we must also bear in mind that many in our audience have been conditioned, through years of exposure to appeals that pander to the selfish side of human nature, to ask what a particular policy can do for them.”

A New Gilded Age Threatens The State Of Our Union by Howard Fineman: “Study after study shows that we are in the midst of a new Gilded Age, in which a yawning, gold-plated gap between the richest and the rest of us risks collapsing the American ideal of fair play and democracy itself.”


Around the Web

Check out these recent articles from around the web:

A Raw Deal: Our Pain, Their Gain by Michael Stafford: “The great task that has been set before us in the coming years is simply this- to break the power of the wealthy and make America’s government one run by and for the people once again.”

China has not been able to hide Liu Xiaobo’s ideas by Dana Nemcova, Jiri Gruntorad and Jan Ruml: “Liu may be invisible outside his prison cell, but the values he spent a lifetime championing are acknowledged by a growing number of Chinese as a key element of China’s future politics. The Chinese government should bow to this reality and free Liu. He should be allowed to again take part in the conversation for democratic reform that he has done so much to foster.”

The New Cardinals by Michael Sean Winters: “Most of the names on the list are unknown to those outside their dioceses. We will get to know more about them in the weeks ahead. My guess is that all of them will, in some significant way, reflect Pope Francis’ own approach to ministry, a certain humility, a commitment to the poor, none of the ‘butterfly’ clerical qualities the pope denounced in a sermon last week.”

The Female Face of Poverty by Maria Shriver: “We have the power—not just to launch a new War on Poverty, but a new campaign for equity, for visibility, for fairness, for worth, for care.”

How Pope Francis Challenges the Right (and Left) by John Stoehr: “Perhaps Francis is challenging liberals to expand their moral horizons, too. He’s doing so by reminding us, though without saying it, that laissez-faire capitalism is the historical legacy of liberalism. Free markets, free trade, and globalization are the hallmarks of a liberalized world economy. So while contemporary liberals are gaga for Francis right now, maybe they should reconsider. He’s not only revealed that Rush Limbaugh isn’t a conservative. He’s revealed that Limbaugh is a champion of a certain kind of liberalism.”

Four new echoes in ‘Francis revolution’ by John Allen: “The pope made headlines by telling the mothers present they shouldn’t be embarrassed if they needed to breastfeed their infants, but the more substantive newsflash was that among those baptized by Francis was a little girl, Giulia, whose parents were married only civilly and thus not in the church.”

Pope Francis & Civil Marriage for Catholics by Michael Sean Winters: “He reminded us that God’s superabundant mercy is greater than any of our sins, His love is greater than any of our troubles, and that if the Church is to be truly the Church of Jesus Christ, this ‘rule’ of grace trumps all others in the pastoral care of the flock entrusted to the Church.”

BBC Newsday: Starvation in Syria leaves children eating grass to stay alive: “Activists say many are now starving in Syria, where one father reportedly tried to set fire to himself and his three children in a Damascus street rather than die slowly of hunger.”

Hunger, death in besieged Damascus area by AP: “Children, the elderly and others displaced by Syria’s civil war are starving to death in a besieged camp where women brave sniper fire to forage for food just minutes from the relative prosperity of Damascus. The dire conditions at the Yarmouk camp are a striking example of the catastrophe unfolding in rebel-held areas blockaded by the Syrian government.”

Thinking Church: Fueling our Fire by Adam Brown, Our Daily Thread: “The MCHM spill, which was only the latest in a century-long line of human and environmental disasters in the mountain state, occurred on a Thursday and affected 300,000 residents, 1/3 of the West Virginia’s population. Yet the Sunday talk shows on January 12 were busy discussing New Jersey Governor Chris Christie’s involvement in the closing of lanes of the George Washington Bridge. Getting to and from the Big Apple quickly is more important than the water and lives of those who extract and transport the cheap energy that powers New Jersey homes, New York commuter trains and high rise office buildings.”

Almost Everything You Read About Parenting On The Internet Is Wrong by Pascal-Emmanuel Gobry: “The parenting stories that are all the rage have all the hallmarks of why our current bourgeoisie is insane.”

Does anybody care about human trafficking? by Phyllis Zagano: “The United Nations reports that at any given time, 2.5 million trafficking victims fuel a $32 billion industry. Half are children. Most are younger than 24. For every 800 persons trafficked, there is but one conviction. It is all over the world. It is not stopping. Small scale or large, the slave trade continues.”

Smoking Has Killed More Than 20 Million Americans Over The Past 50 Years by Tara Culp-Ressler: “Lushniak noted that smoking has contributed to the premature deaths of an estimated 20 million Americans since the publication of the groundbreaking report in 1964. 2.5 million of those deaths were related to secondhand smoke.”

Poll: Younger Christians less supportive of the death penalty by Jonathan Merritt: “It showed an even sharper difference in support for the death penalty among ‘practicing Christians,’ which Barna defined as those who say faith is very important to their lives and have attended church at least once in the last month. Nearly half of practicing Christian boomers support the government’s right to execute the worst criminals, while only 23 percent of practicing Christian millennials do.”

Ukraine warns Church over prayer services for protesters by Agence France-Presse: “The Ukrainian government has threatened to outlaw the Ukrainian Greek Catholic Church for holding prayer services for opposition protesters occupying Kiev’s central square.”