Taxation–A Religious and Ethical Proposition

The day prior to this year’s filing deadline, the H-T reported that almost 60% of Americans regard the income tax as unfair. Would people prefer paying 25% federal tax on all purchases of goods and services? What about a 100% estate tax–no more inheritances! Eliminate the income tax and other revenue sources would have to increase substantially. But what about the fairness issue?

Susan Hamill, an evangelical Christian and Law Professor at the University of Alabama, argues vigorously for a Christian-based system of taxation. A recent example is her article in the Winter 2006 Virginia Tax Review, “An Evaluation of Federal Tax Policy Based on Judeo-Christian Ethics.” Claiming that Judeo-Christian teachings on wealth “impose greater moral obligations on those enjoying higher levels of income and wealth,” she calls for a moderately progressive tax structure.

While I would argue somewhat differently, I share Hamill’s basic conclusions. The most fair, just, and equitable system of federal taxation is one based on ability to pay. Ability to pay directly reflects the extent to which one has gained from living in this society, reaping its economic benefits. It is only fair that those who benefit most from society should also pay the most to support it. [Contrary to popular opinion, hard work is only marginally related to economic status. Surely migrant laborers and hotel maids work as hard as top executives, celebrities, and athletes.]

As Hamill notes, scripture teaches that “to those to whom much is given, much will be required.” Christian notions of love and justice suggest that income and wealth must be the primary bases for taxation. In my view, our current income tax is not progressive enough, and inheritance taxes should be increased, not eliminated. Children of the rich deserve a hefty inheritance no more than the poor. Moral arguments can also be made for taxing consumption when it imposes a burden on others, e.g., when it is accompanied by environmental degradation or threats to health. There’s a place for “harm taxes” (not “sin taxes”), but only as secondary to taxes on income and wealth. The federal income tax should also be greatly simplified. Complexity advantages the rich, who can hire lawyers and accountants to help them avoid taxes.

Christian social ethics seeks the common good, and recognizes that the more we benefit from our common life, the greater our obligation to support equitable political structures and social programs with our taxes.