Trump’s bankruptcies prove why the wealthy should pay higher taxes

During Thursday’s Fox News Republican Presidential Candidate Debate, Chris Wallace asked Donald Trump about his most recent bankruptcy in which the banks to which Trump’s company was indebted lost over one billion dollars. Trump responded that the banks were evil in an attempt to convince us that the bankruptcy was no big deal. He may have been correct that the bankers were bad, but that’s missing the point.

We have to ask ourselves, “Where did the bankers get the billion dollars they lent to Trump’s company and then lost? Whose money was that?”

It was the depositors’ money.

It belonged to those who placed their money in the bank’s investment vehicles. These people expect to get their money back – with interest. And the banks have to make up for the money they lose in corporate bankruptcies by charging higher interest rates, more fees to their customers, and higher fees to businesses when they accept payments through corporate credit cards. So the money Trump failed to pay the banks was effectively stolen from the banks’ customers.

Corporate bankruptcy is legalized stealing!

In fact, a corporation is a system of legalized stealing!

Unlike sole proprietors and partnerships, who are held personally liable for their debts, corporate owners receive “liability protection” from the government. They get to make millions of dollars when business is good, but when their risk-taking goes awry, and they owe millions or billions of dollars that the company cannot afford to pay, they are personally free from having to pay any of it. The “company” goes bankrupt, but the owners of the company get to keep the profits they’ve been paid out during the years in which business was good. If it weren’t for corporate liability protection from the government, the owners might have to spend all they have in order to cover the debts, even if it makes them homeless and personally-bankrupt (which Trump made very clear in the debate that he has never been), and that would make corporate ownership financially dangerous and unattractive to the point that corporations and the stock market might not even exist.

It’s this “ownership without responsibility” that enables corporations to attract thousands of owners, which are commonly called “investors” or “shareholders,” and thus become so large that they can sell products nationwide or even worldwide, making their owners richer than was ever possible throughout all of human history. And these owners don’t have to put all of their eggs in one basket. They can own portions of many companies by owning stock.

So are you guilty of partaking in this system of stealing if you are financially well off but not a corporate owner?

Most likely, yes!

If you own stock to any degree, you are a corporate owner who benefits from liability protection. (You wouldn’t risk investing in stock if you might have to pay more than you invested because the company accumulated debts it couldn’t pay.) Yes, the shares you own might be very small in comparison to wealthier shareholders. And even if you don’t own stock but get a hefty paycheck from a corporation (ballplayers being the most extreme example of this), you still benefit from this system of stealing. No matter how you slice it, if you’re rich, you got rich because you took advantage of a legalized system of stealing.

So how can we justify having a liability protection system that steals from society to enrich the wealthy?

The only way I think it could possibly be justified in God’s eyes is if we require those who get wealthy from this system (which is just about all wealthy people) to pay a higher percentage of their income to taxes, and for those taxes to serve the common good and better the lives of those crushed and left out by the system. In fact, if we don’t insist on balancing out the system in this manner, we are evil, because we will effectively endorse a system in which the wealthy force the debts on society without allowing society to share in the gains. That’s the opposite of the Bible in which God required a national, mandatory redistribution of wealth from the haves to the have-nots, but had no system that enabled the wealthy to legally steal from society.

Some might say we should abolish corporate liability protection, but then world as we know it would collapse. You wouldn’t even be able to get gasoline without corporations. To live in the modern world, we need them. Therefore, I don’t have a problem with a system that makes society share in the debts caused by the risks that wealthy investors take, as long as society is entitled to share in the gains that wealthy investors make.

7 Bible Quotes of Social Justice as a Purpose of God’s Law

breaker boys

[This article is an excerpt from the book, “Rescuing Religion from Republican Reason”]

Republicans and Evangelicals have found common ground in their opposition to social justice. Naturally, justice for the poor flies in the face of what the Republicans have been doing since the 1870s – representing the wealthy oppressors of the poor. The evangelical church, however, tends to oppose social justice for a different reason: Many churches, especially mainline denominations, have had a tendency throughout the 1900s to emphasize social justice while ignoring the importance of personal salvation and relationship with God through Jesus Christ. In other words, they embraced the great commandment of “love your neighbor as yourself” but ignored the great commandment of “love the Lord your God with all your heart, with all your soul, and with all your mind.” So the evangelicals countered this error by embracing the “love the Lord your God” commandment while despising the “love your neighbor” commandment, at least in terms of social justice. Today, many Bible-believing evangelical churches teach little more than, “You’re saved! Now praise the Lord for it, and get others to join the club!” This fits perfectly with the Republican Party’s agenda. The last thing they want is for the Christian voters they depend upon to second guess Republican support for the wealthy at the expense of the lower class.

Salvation, praise and evangelism are all cornerstones of the Christian faith. But they are not the only ones. If they were, the Bible would be a much smaller book. Common sense tells us we can love God and our neighbors, on both personal and social levels, simultaneously. The Bible never gives the slightest indication that choosing one over the other is ever an option. Thanks to Republican evangelicals burying social justice, I feel a need to resurrect the Bible’s social justice commands. Here are several:

Isaiah 1:17, “…learn to do good, seek justice, rescue the oppressed, defend the orphan, plead for the widow [NRSV].”

This is not a call to simply hand money or food to the needy. Doing so is not justice; it’s assistance. The Bible calls us to this as well, but assistance does not replace justice; it compliments it. We are to rescue the oppressed from the harm of those who oppress them.

How do we do that?

Do we kidnap them from their workplaces and set them free in the woods?

No.

This verse commands us to plead their cases, to defend their causes. Only politically-oriented action will accomplish this. Similar to the word justice is the word judicial. The judicial system enforces the law, which is established by legislatures, which consist of legislators who, in a democracy, are chosen by voters. This passage calls God’s people to political action.

Isaiah 10:1-2, “Woe to those who make unjust laws, to those who issue oppressive decrees, to deprive the poor of their rights and withhold justice from the oppressed of my people, making widows their prey and robbing the fatherless [NIV].”

What does it mean to enact unjust laws and oppressive decrees? It’s rare that a law literally commands people to oppress the poor. Rather, oppressive laws give power to oppressors and give their “prey” little or no recourse. We’ll examine some unjust and oppressive laws in the Liberty and Small Government chapters.

Isaiah 58:3…6, “‘Why do we fast, but you do not see? Why humble ourselves, but you do not notice?’ Look, you serve your own interest on your fast day, and oppress all your workers…Is this not the fast which I choose; to loose the bonds of injustice, to undo the thongs of the yoke, and to let the oppressed go free, and to break every yoke?’ [NRSV]”

God ignores our worship of Him when we do the opposite of His will. If we commit and permit injustice against the poor, then our hate, hurt, and neglect of God’s children hurts God more than our praise pleases Him.

Jeremiah 5:28-29, “They have grown fat and sleek. They know no limits in deeds of wickedness; they do not judge with justice the cause of the orphan, to make it prosper, and they do not defend the rights of the needy. Shall I not punish them for these things…? [NRSV]”

Again, here God requires that His followers who have political power or input “Defend the rights” of the needy – yet another call for political action, because rights can only be defended by the strong arm of the law.

Notice that God wants those in power to “make” the orphans prosper. He denies the wealthy the right to do whatever they want with their money and power. When they assume such a right, God’s punishment follows.

When we seek, establish, and uphold a system of justice for the lower income people of the working class, they actually prosper; they don’t fall into poverty. This is what the Bible calls us to. Unfortunately, many Republican Christians think God wants us to let these people plummet to rock bottom, and only then, after they’ve lost it all, are we to assist them with handouts. This is cruel. God, on the other hand, is gracious; and He desires that none of us lose it all and then have to rely on the whims of the wealthy to meet our needs.

Proverbs 31:8-9, “Speak out for those who cannot speak, for the rights of all the destitute. Speak out, judge righteously; defend the rights of the poor and needy [NRSV].”

Again, this is not about handouts; it’s about speaking up for the poor. In any non-democratic government, the poor had no means of representing themselves. In America today, they do. But if we vote for politicians who oppose the well-being of the poor, their cries are rendered ineffective.

Proverbs 29:7, “The righteous care about justice for the poor, but the wicked have no such concern [NIV].”

This is a strong statement. If you have no concern for protecting the powerless from the powerful by political means, the Bible says you’re “wicked!”

Jeremiah 22:15-16, “’Do you become a king because you are competing in cedar? Did not your father eat and drink, and do justice and righteousness? Then it was well with him. He pled the cause of the afflicted and the needy; then it was well. Is that not what it means to know Me?’ declares the Lord.”

Many Republican Christians today disagree with the last line of this passage. They do not believe that pleading the cause of the afflicted and needy has anything to do with knowing God (many of them would condemn pleading the cause of the afflicted and needy as “class warfare”). To them, knowing God is just about praying, singing songs, praising His name, and avoiding such personal behaviors as drinking, smoking, swearing, etc. The focus of their entire faith is on God and their own rule-following, but rarely on the well-being of others.

To the contrary, this passage tells us that if we don’t plead for the well-being of the needy and the afflicted, and seek justice on their behalf, then we really don’t know God. In this case, the god we praise is just a figment of our imaginations – an extension of our own selfishness that we claim to be the God of the Bible, but that better represents His adversary.

14 Bible verses proving that God’s laws are for the well-being of others

What does the purpose of God’s laws have to do with politics?

Well, politicians, especially of the Republican variety, often have principles that they say are more important than the well-being of people. For example, if we promote a healthcare solution, they argue that, even if it works, it’s evil, because it doesn’t preserve the higher principles of small government, or liberty, or pure capitalism. As the self-proclaimed “Christian Party”, the Republicans should align their morality with the Bible, if they do not want to be hypocrites. So let’s see if the Bible is more concerned with these man-made principles, or whether God’s laws are about the well-being of people.

(By the way, in looking at the purpose of God’s laws, I am in no way saying that our nation, which has guaranteed its people religious freedom from the beginning, should make its laws according to the Bible. I’m simply saying that if the Republicans are going to oppose solutions in the name of “that’s not right,” and they claim their morality comes from Christianity, then their ideologies must be biblically supported. That’s why I wrote the book, “Rescuing Religion from Republican Reason.” It tackles their false moral arguments in depth using the Bible, economics, and history)

Fortunately, determining the purpose of God’s laws is easy, because in some cases, God even includes the reasons for the Old Testament laws in the passages in which they are given. Here are some of those passages (the reasons for the laws are in italics):

Exodus 22:21-24, “You shall not wrong a stranger or oppress him, for you were strangers in the land of Egypt. You shall not afflict any widow or orphan. If you afflict him at all, and he does cry out to Me, I will surely hear his cry; and My anger will be kindled, and I will kill you with the sword; and your wives shall become widows and your children fatherless.”

Exodus 22:26-27, “If you ever take your neighbor’s cloak as a pledge, you are to return it to him before the sun sets, for that is his only covering; it is his cloak for his body. What else shall he sleep in? And it shall come about that when he cries out to Me, I will hear him, for I am gracious.”

Exodus 23:8, “And you shall not take a bribe, for a bribe blinds the clear-sighted, and subverts the cause of the just.

Leviticus 19:16, “Do not do anything that endangers your neighbor’s life.”

Deuteronomy 5:14, “…but the seventh day is a Sabbath of the Lord your God; in it you shall not do any work, you or your son or your daughter or your male servant or your female servant or your ox or your donkey or any of your cattle or your sojourner who stays with you, so that your male servant and your female servant may rest as well as you.”

Deuteronomy 6:24, “So the Lord commanded us to observe all these statutes, to fear the Lord our God for our good always and for our survival, as it is today.”

Deuteronomy 14:28-29, “Every third year you shall bring out the full tithe of your produce for that year, and store it within your towns; the Levites, because they have no allotment or inheritance with you, as well as the resident aliens, the orphans, and the widows in your towns, may come and eat their fill so that the word of God may bless you in all the work that you undertake [NRSV].”

Deuteronomy 20:5-7, “The officers shall also speak to the people, saying, ‘Who is the man who has built a new house and has not dedicated it? Let him depart and return to his house, lest he die in the battle and another man dedicate it. And who is the man that has planted a vineyard and has not begun to use his fruit? Let him depart and return to his house, lest he die in the battle and another man begin to use its fruit. And who is the man who is engaged to a woman and has not married her? Let him depart and return to his house, lest he die in the battle and another man marry her.”

Deuteronomy 22:8, “When you build a new house, you shall make a parapet for your roof, that you may not bring bloodguilt on your house if anyone falls from it.”

Deuteronomy 24:5, “When a man takes a new wife, he shall not go out with the army, nor be charged with any duty; he shall be free at home one year and shall give happiness to his wife whom he has taken.”

Deuteronomy 24:6, “Do not take a pair of millstones – not even the upper one – as security for a debt, because that would be taking a man’s livelihood as security [NIV].”

Deuteronomy 24:14-15, “You shall not oppress a hired servant who is poor and needy, whether he is one of your countrymen or one of your aliens who is in your land in your towns. You shall give him his wages on his day before the sun sets, for he is poor and sets his heart on it [“livelihood depends on it” in the NIV]; so that he may not cry against you to the Lord and it become sin in you.” [notice that God doesn’t blame the poor for class warfare here; he blames those responsible for the poor man’s condition.]

Deuteronomy 24:21, “When you gather the grapes of your vineyard, you shall not go over it again; it shall be for the alien, for the orphan, and for the widow.”

Deuteronomy 26:12, “When you have finished paying all the tithe of your increase in the third year, the year of tithing, then you shall give it to the Levite, to the stranger, to the orphan and to the widow, that they may eat in your towns and be satisfied.”

The overwhelming other-centered nature of God’s Law is a great testament to who He is and what He is about. His Law is selfless, because He is selfless. He always places our interests ahead of His, just as He did when he sent Christ to save us from the consequences of our sins.

If anyone is to say that they oppose a political policy because it is evil in God’s eyes, then they must show that it hurts people more than it helps people, because God’s law is concerned with helping people. Any man-made ideology that gets in the way of the well-being of the needy is an evil ideology.

Republican Tax Lie #4: “Reducing investment taxes is beneficial”

[The following excerpt is from my book, “Rescuing Religion from Republican Reason.”]

Capital Gains Taxes

I’ve heard some Christian Republicans say it’s morally wrong to tax capital gains, as if it doesn’t count as income. This is nonsense. Let’s say you buy a restaurant for a million dollars. You own it for five years and make nice profits from your customers. Then you sell the restaurant for 2 million dollars. So, in addition to your operational profits, you get a bonus of 1 million dollars when you sell the place. Why should that money not be taxed?

Some will say the Bible has no capital gains tax, so neither should we. In the Bible, however, all Israelite males inherited land; they never paid for it. And most land sales were made to pay off debts, not to get rich. And then, every fifty years, in the Year of Jubilee, lands had to be given back to their original owners or their descendants, so all land deals were temporary, not permanent. It’s quite a different set up from what we have today. Also, the Israelites had no stock market, which, as I stated before, is founded on liability protection for the shareholder. The fact that you receive liability protection when you buy stock is all the more reason why you should pay taxes on your gains.

Those who argue against capital gains cuts plead the cause of the rich, not the needy. They’ll say almost everyone benefits from a capital gains cut, because a lot of lower income people have a 401k that invests in stocks. This is true to a small extent, but 96% of capital gains are realized by people earning over $100,000 per year and 67% from those earning over $1,000,000. Capital gains tax cuts clearly favor the rich.

Republicans proclaim that capital gains cuts make the stock market boom, and that’s good for everyone. Indeed, it makes investors richer, but it’s less beneficial to low income non-investors. What they fail to proclaim is that economic crashes, which hurt the working class, follow soon after. Three of the four biggest stock market meltdowns of the past century were preceded by large capital gains tax cuts within 5 years prior. After most WWI debts had been paid, the Harding and Coolidge administrations gradually lowered taxes (capital gains were taxed the same as income back then) from a top marginal rate of 73% in 1921 to 25% in 1925. For 5 years, the Dow soared from a value of 100 in 1924 to 380 in 1929, but then came the massive crash that ushered in the Great Depression. In 1997, the capital gains rate was cut from 28% to 20% to encourage investing, even though the Dow had already grown from 4000 in January of 1994 to 6000 in January of 1996. Three years after the cut, the market crashed again in what some call the Dot-Com Bust. In 2003, capital gains were cut to 15% to help the market rebound, but 5 years later, the market crashed again, losing half its value. One might argue that this crash was due to the housing bubble, but let’s not forget that tax savings from the Bush tax cuts were often invested in real estate, where capital gains rates also apply, because people were afraid to invest in stocks after the Dot-Com Crash. Crashes like these will continue as long as there’s insufficient consumer spending money to buy the products that stock investments create.

Lower tax rates are a horrible reason to invest in stocks. What happens after a capital gains tax cut is that people rush to invest without caution, because they anticipate the market will boom due to the lower tax rate. So many people think this will happen that it actually does. In fact, Republicans love to point out how capital gains tax revenues increased even though the rate decreased. But this is only temporary. Eventually, the stocks become overvalued, and the prices plummet, causing a panic and crashing the market and the economy along with it. A smart investor invests in a company’s stock because he expects the company to become profitable, and he wants to become part-owner of it (which is what happens when you buy stock), so he can share in the profits (dividends). That’s the only legitimate reason to invest in stocks.

Unfortunately, every time a Republican gets elected president, his first order of business is to lower taxes in the name of boosting the economy. If he doesn’t cut spending to match, the economy will heat up, maybe even become too hot, but then it will return to recession as it has at least once in every decade in U.S. history. When it does, the tax rates are so low that the government can’t come close to paying its bills, and the nation’s debt skyrockets. All that’s accomplished in the end is an increase in the gap between the rich and the working class, which I believe is the ultimate goal of the Republicans and the wealthy people they represent. Tax cuts should not be used to manipulate the short term economy, just so a new president can get re-elected in 4 years. They should be set at a rate that’s fair and can pay the nation’s bills and be left at that rate.

Perhaps the discussion should not be whether tax revenues increase every time we cut capital gains tax rates. Perhaps, instead, we should examine which capital gains tax rate is most effective over the long haul at maximizing revenue, and then stick with that rate. Let’s compare the 20% rate instated in May 1997 to the 15% rate of May 2003 (these numbers come from the most recent capital gains study at the Treasury Department website that goes through 2009). And let’s compare the amount of capital gains realized (not taxes paid, but gains reported) under each rate as a percentage of GDP (GDP comparisons allows us to factor out inflation that would make more recent numbers larger than older ones). What we find is that the average capital gains realizations as a percentage of GDP from 1998-2002, under the 20% rate, were 4.28% per year. Under the 15% rate from 2004-2009, the realizations were also, amazingly, 4.28% per year. (Both periods, by the way, started with a stock market boom and ended with a bust, so we’re comparing similar situations.) In other words, the 15% tax rate did not produce the slightest bit higher capital gains realizations than did the 20% tax rate. All it did was tax the gains at a lower rate and decrease tax revenue. The 20% rate provides investors with all of the tax incentives they need to encourage investing, and lower rates add no further incentives. So it appears that rates below 20% do nothing to increase capital gains realizations, and rates over 20% (such as the 28% rate from 1987-1997) hurt realizations. Thus, 20% is the optimal capital gains rate. So let’s stick with it!

The Tea Party Religion

So, again, the Republican claim that tax cuts always pay for themselves is untrue. So are the claims that taxes hurt the economy, that Democrats spend more than Republicans, that low tax countries fare best, and that income taxes are evil. These deceptions, along with all Tea Party anti-tax rhetoric, are rooted in a single motive – the love of money. As Ecclesiastes 5:10-11 says, “He who loves money will not be satisfied with money, nor he who loves abundance with its income. This too is vanity. When good things increase, those who consume them increase; so what is the advantage to their owners except to look on (‘see them with his eyes’ in the NRSV)?”

Human nature hasn’t changed one bit since Old Testament times. Worshipers of wealth still can’t get enough. And today, they run a 24 hour-a-day propaganda campaign to get voters to favor their greed over others’ needs. The new religion they’ve established is called the Tea Party. At its heart is loving money so much that paying taxes makes your blood boil, especially when you suspect that your tax money will go to someone you think is less worthy than yourself. If this describes you, then you love money more than God. And Jesus made it clear that you can’t serve both God and money. You’ll love one master and hate the other.

I understand it stings a little to see a significant chunk of your pay taken from your paycheck. The next time you have that feeling, just remember that the rest of us pay taxes, too. And those who don’t are usually not in enviable positions. If we all stopped paying taxes tomorrow, we’d all have more money to bid on houses and cars, which would simply drive up prices. More money wouldn’t create more goods, houses, or land. It would just mean that we all pay more for them. (Of course, on the back end, everyone who works for the government or companies that are contracted by the government would lose their jobs, and entitlements would go away, taking money back out of the economy and crashing it.) If you make enough money to pay one of the higher tax rates, your life is pretty good, at least financially speaking. You have far more comfort, enjoyment, and good food than anyone in the Bible ever did. Appreciate what you have, thank God for it, and focus your energies on the well-being of others rather than on your efforts to hoard wealth.

Republican Tax Lie #3: “Democrats spend more.”

President-elect Obama with Nancy Killefer, the new Chief Performance Officer, for his administration. The news conference held at the transition office in Washington, D.C. on Jan. 7, 2009. President-elect Obama with former Presidents Bush (41), Carter and Clinton and current President Bush at the WHite House on Jan. 7, 2009. (Photo by Pete Souza)

President-elect Obama with Nancy Killefer, the new Chief Performance Officer, for his administration. The news conference held at the transition office in Washington, D.C. on Jan. 7, 2009.
President-elect Obama with former Presidents Bush (41), Carter and Clinton and current President Bush at the WHite House on Jan. 7, 2009.
(Photo by Pete Souza)

[The following excerpt is  from my book, “Rescuing Religion from Republican Reason.”]

(I’ll admit that this is more of a budget lie than a tax lie, but it’s what follows next in the taxation chapter of the book, so I included it here.)

The Republicans love to accuse Democrats of engaging in out-of-control spending. In the case of Barack Obama, they’ve said he spends more per year than any president in history. What they fail to tell us is that this is true for every president, because inflation and population growth drive up spending numbers over time, even without changes in fiscal policy. To make a more accurate assessment of who the big spenders have been, I think it’s best to determine who increased spending the most from year to year. So I’ve gathered total federal spending numbers from the historical tables of the White House budget (which you can find at whitehouse.gov) (these numbers can also be found at the Congressional Budget Office website.), and then I calculated how much each year’s spending increased from the previous year. I then averaged the increases by president to see who increased spending the most.

Spending and Annual Increase % by President
Federal Outlays (billions) / % Increase from Previous Year
1981    678.2            Carter
1982    745.7           Reagan        9.95%
1983    808.4          Reagan        8.41%
1984    851.8           Reagan        5.37%
1985    946.3          Reagan        11.09%
1986    990.4          Reagan        4.66%
1987    1,004.0       Reagan        1.37%
1988    1,064.4      Reagan        6.02%
1989    1,143.7       Reagan        7.45%
1990    1,253.0       Bush41        9.56%
1991    1,324.2       Bush41        5.68%
1992    1,381.5       Bush41        4.32%
1993    1,409.4      Bush41        2.02%
1994    1,461.8       Clinton        3.72%
1995    1,515.7        Clinton         3.69%
1996    1,560.5       Clinton         2.96%
1997    1,601.1        Clinton         2.60%
1998    1,652.5       Clinton        3.21%
1999    1,701.8       Clinton         2.98%
2000    1,789.0     Clinton         5.12%
2001    1,862.8      Clinton        4.12%
2002    2,010.9     Bush43       7.95%
2003    2,159.9      Bush43       7.41%
2004    2,292.8    Bush43       6.15%
2005    2,472.0     Bush43       7.81%
2006    2,655.1     Bush43       7.40%
2007    2,728.7     Bush43       2.77%
2008    2,982.5    Bush43       9.30%
2009    3,517.7     Bush43       11.40%
2010    3,456.2    Obama        10.4%
2011     3,603.1    Obama        -1.54%
2012    3,796.0    Obama       5.36%
2013    3,803.0    Obama       0.18%

[Note: 203 billion dollars of Obama stimulus from fiscal year 2009 was subtracted from Bush 43’s 2009 total and added to Obama’s 2010 total when increase percentages were calculated.]

Average Annual % Increase by President

Reagan      6.79%

Bush 41     5.40%

Clinton      3.55%

Bush 43     7.52%

Obama      3.60%

 

Unlike in the 1970s, inflation levels have been low throughout this period, so they have little effect on the numbers. Ronald Reagan endured an average inflation rate about 1% higher than the other presidents did, so we could knock a point off and lower his increase rate to 5.79% to be fair. Nonetheless, the Republicans prove to have been far bigger spending escalators than the Democrats over the past three decades. Meanwhile, Clinton and Obama have been the most frugal of all modern presidents, increasing spending at rates barely above the inflation rate. Some might argue that Reagan couldn’t cut welfare spending because he had a Democratic Congress and that Clinton may have been restrained by a Republican Congress his last six years. So let’s look at the budget years in which a single party controlled all of Congress and the presidency:

Republicans 2002-2007: 6.58% average spending increase per year.
Democrats 1994-1995, 2010-2011: 4.07% average spending increase per year (This number includes 203 billion dollars of Democrat-approved stimulus money spent during fiscal year 2009.)

Even when they have had total control, Republicans have increased spending at a rate 50% greater than that of the Democrats. And if it weren’t for the economic stimulus needed to fix the free-falling economy when Obama took office, the percentage rate for the Democrats likely would have been lower. If you’ve been voting Republican because you hate government spending, you’ve been taken for a fool.

Tea Party libertarians might argue that it was old guard Republicans who were out-of-control spenders, but if the Tea Party takes over, they will slash spending, and we’ll all be better off. Having worked in the corporate world, I know what happens when budget-slashing executives take control of a company. They mindlessly cut departments’ budgets to the point where they cannot function. The company then loses customers due to poor customer service, lack of product development, and insufficient advertising. Similar catastrophes happen when the government gets slash-happy. If they slash funding for child support collections (my sister worked in this field at a time of budget cuts, so this is her experience), then fathers get away with failing to pay support for their children. Then the women who lose their child support have to go on welfare, costing tax-payers far more than if the budget cuts had never been made. Also, this budget slashing keeps the government from enforcing the law, encouraging more people to do evil. This reality applies to the business world, too. Tea Party libertarian, Ron Paul, proposed to make 40% cuts to regulatory agencies like the FDA and the EPA in his 2012 budget proposal. Should such a proposal ever succeed, it will give license to big businesses to poison our food and our environment. I’m all for making government more efficient and cost effective, and so are many Democrats and Republicans, but the mindless budget slashing of the Tea Party will only lead to disaster.

Republican Tax Lie: “Tax cuts don’t add to the debt”

Deficits_vs._Debt_Increases_-_2008

[The following excerpt is from my book, “Rescuing Religion from Republican Reason.”]

 

Do Tax Cuts Always Pay for Themselves?
One of the great deceptions promoted by Republican Christians is that tax cuts always pay for themselves. So anytime Republicans propose a tax cut (which is all of the time, regardless of whether we have a good or bad economy, a budget deficit or surplus), they insist it will help the economy without adding to the nation’s debt. They tell us the economic growth from the tax cuts will be so great that it will more than compensate for the decrease in the percentage of incomes taxed. And the way Republicans do this is by cherry-picking the numbers and quoting numbers without making proper comparisons. To give you an example of the latter, a popular internet meme has been that Reagan cut taxes from a top rate of 70% to 28% (although they fail to mention that he increased the capital gains tax rate to 28%, compared to the 20% rate we have now, and he increased rates for lower income workers) and, as a result of that cut, total income tax revenues increased from $360 billion in 1980 to 660 billion in 1990, so this proves that taxes actually increased after the Reagan tax cut. This is true, as you can see from the following print screen from Table 6 of the IRS Data Book, which you can find at www.irs.gov (The first screen shot is of the header, so you can see how the columns are labeled):

 

IRS header

IRS 80s
However, if we look at the years following the Reagan 1981 tax cut, you’ll see that total income tax (column 2) went from 406 billion in 1981, to 418 billion in 1982, to 411 billion in 1983, so if you adjust for inflation, which was around 5% at the time, it was actually a slight loss for a few years. Only if you look at the whole decade can you say that the tax revenues really went up. But the fact is that the normal rate of annual tax revenue growth that always comes from annual inflation growth, population growth, and production growth was halted for a few years by the Reagan tax cuts, which put us behind the 8-ball and contributed greatly to the 189% increase in the national debt (the worst of any president in history) that Reagan oversaw during his 8 budget years.

The bigger question here, however, is, “How do these numbers compare?”
So here are the 1960s, 70s, and 90s numbers:

IRS 60s IRS 70s

IRS 90s
In the 1960s, income tax revenues increased from 67 billion to 139 billion (a 107% increase);
In the 1970s, income tax revenues increased from 139 billion to 360 billion (a 158% increase);
In the 1980s, income tax revenues increased from 360 billion to 650 billion (a 80% increase);
In the 1990s, income tax revenues increased from 650 billion to 1,372 billion (a 111% increase).
So we see that the 1980s had the lowest tax revenue growth of the four decades; therefore, when it comes to paying our bills, Reagan’s tax cuts proved to be the worst revenue solution for our country during those decades, and quite likely the worst of the century.

Of course, the worst of the worst was yet to come, thanks to the 2001-2003 Bush tax cuts which dropped the capital gains rate all the way down to 15%. Here are the 2000s:

IRS 00s

In the 2000s, income tax revenues increased from 1372 billion to 1453 billion (a 6% increase). If you factor out inflation and population growth, the tax cuts resulted in a massive loss in annual revenues by the end of the decade.

The right-wing Christian book, “Politics According to the Bible”, by Wayne Grudem, dares to use the Bush tax cuts to make the same claim that tax revenues always increase after a tax cut. What he does is cherry-pick the year 2005, the first year tax revenues returned to a point above where they were before the tax cuts were enacted in 2001, and only cites the 16% revenue growth rate from that year as proof the tax cuts increase revenue. He hides from his readers the fact that total income tax revenues fell from 1.365 trillion in 2001 to 1.249 trillion in 2002, and fell further to 1.181 trillion in 2003, and then rose back up to 1.221 trillion in 2004, and finally 1.415 trillion in 2005. If you look at the years leading up to the cuts, on the other hand, you’ll see that income tax revenues increased from 717 billion in 1993, the year of the Clinton tax increases, to 1.365 trillion in 2001. That’s revenue growth of 81 billion per year that mostly came from GDP growth (as well as inflation and population growth, as always), all despite the fact the Clinton raised taxes on the rich, which Republicans had predicted would be economic Armageddon. The Bush tax cuts reversed this growth and undermined our nation’s ability to pay its bills. According to an analysis by the Congressional Budget Office, the Bush tax cuts cost the U.S. 2.8 trillion dollars in tax revenue from 2002 to 2011, a loss of 280 billion dollars per year. Yes, conservatives might argue that revenues did increase for a few years before the 2008-2009 recession began, a recession caused by a housing bubble that was largely fueled by the wealthy dumping their Bush tax cut savings into real estate investing (which was attractive at the time due to low interest rates), but then revenues stagnated again. So while the Reagan tax cuts may have resulted in an 80% increase in annual income tax revenues from 1980-1990, the Bush tax cuts only resulted in a 6% increase in annual income tax revenue from 2000 (1372 billion) to 2010 (1454 billion). That might be the worst decade of tax revenue growth of all time.

All of this isn’t to say that tax cuts have never paid for themselves. The Kennedy/Johnson tax cuts of 1964 did increase revenue as a result of improving the economy. But let’s not forget that these cuts lowered the top marginal income tax rate from 91% (Wow!) to 70% (still “Wow!” – by today’s standards) and the corporate tax rate from 55% to 47%. The rates of 70% and 47% still collected such a large percentage of growing incomes that tax revenues increased. But when Reagan lowered the top rate to 50% in 1981 (and to 28% in 1986, while raising capital gains), the results weren’t as good. It was just short of a break-even for the budget. Then the Bush tax cuts lowered the top rate to 35% (and capital gains to 15%), which delivered a serious blow to the budget. And it can get worse going forward. The budget proposed by 2012 vice presidential nominee and Republican Congressional Budget Director Paul Ryan called for a 25% top marginal income tax rate and for 0% capital gains, dividends, interest, and corporate tax rates. Zero times any amount of growth is zero dollars of tax revenue! The Ryan plan would have been the fast track to debt doomsday – a day when no one will lend the government money out of concern over their ability to pay it back. At that point, the government will have to print money to pay its debts, like Mexico did in the 1980s (which resulted in 4 straight years of over 100% inflation per year). We can avoid such a fate by establishing tax rates that pay our bills as we did in the 1990s. Some would say to cut spending instead, but both parties have proven that, given total control, they can’t limit spending enough for our current tax rates to pay for it.

Today’s Republican approach to tax cuts is all out idiocy. The idea that cutting tax rates lower and lower will always increase revenue is a lie. Any sensible person should realize that there is a threshold below which lower tax rates will hurt tax revenues. If you drop the rates too low, the debt grows. Reagan proved that a little. Bush proved it a lot. And judging from the rhetoric of Republican candidates like Ted Cruz, Mike Huckabee, and Rand Paul, the Republicans are prepared to cut rates even lower to a point from which we will never recover in our lifetimes.

Oh, and one more thing…Republicans also like to say that increasing income tax rates will damage the economy so badly that tax revenues will fall. For example, Mike Huckabee said in his book, “A Simple Government,” published in 2011, “‘Arthur Laffer…the father of Supply Side economics…anticipates that the rise in taxes from the expiration of the Bush tax cuts [in 2012]…will cause a “crash in tax receipts,”…causing even higher deficits and unemployment.” Well, Obama went ahead and let the Bush tax cuts for the wealthy expire at the end of 2012. So did tax receipts “crash” in 2013 and 2014?

See for yourself:

IRS 10s

 

Isn’t comprehensive economic data a bugger if you’re a hardcore Republican?
It’s like kryptonite, isn’t it?

 

 

 

Republican Tax Lie: “Low tax countries fare best”

OECD taxes

[The following excerpt is from my book, “Rescuing Religion from Republican Reason.”]
Do Taxes Hurt the Economy?

Should you have an opportunity to counter conservative arguments with what I’ve shared thus far, it’s likely that, at some point in the conversation, your opponent will abandon the “what’s right” argument and switch to the “what works” argument. In doing so, they’ll argue that taxes are bad for the economy, and the lower the taxes, the better off we all are.

Before we get into theory about how economics works, let’s look at some international numbers comparing economic growth and tax rates for long-time capitalist countries:

 

 

Avg. Annual Real GDP Growth & Taxes as a % of GDP, 1979-2010

Country       Growth         Tax/GDP
Ireland              3.2%                  28.4%
Norway             2.0%                  40.8%
Finland             2.0%                  35.6%
Spain                 1.9%                   22.0%
Japan                1.9%                   24.3%
U.K.                   1.8%                   31.9%
Australia           1.8%                  25.0%
Netherlands    1.7%                  42.6%
Austria              1.7%                   38.4%
Sweden             1.7%                   46.7%
Belgium            1.6%                   43.0%
U.S.                    1.6%                    26.0%
Canada             1.4%                    38.7%
Denmark         1.4%                     42.1%
[Source: OECD/Bureau of Labor Statistics via “The Benefit and the Burden” by Bruce Bartlett]

 

 

Of the large, well established economies in the world, ten of them have had GDP growth greater than the United States in the years since we embraced the anti-tax ideology of the Reagan Revolution. Of those ten, seven have had higher taxes than us, some of them much higher. Two of the three countries with lower tax rates than the United States have serious debt problems. On the other hand, none of the countries taxing above 30% have serious debt problems, except Belgium. More remarkable is the fact that every country on this list, except Spain, had a lower unemployment rate than the U.S. as of 2011, and all of them have a longer life expectancy for their people. No need to despair, however, the U.S. does lead this group in one category: We have richer rich people than anyone in the world!

Tea Party conservatives love to talk economic theory, but they hate comprehensive international comparisons like this one, because they indicate that other countries are doing better than the U.S., despite not practicing Republican every-man/woman/child-for-itself policy. For 30 years after WWII, America had a huge advantage over European nations that had been reduced to rubble by the war and needed American manufacturing to rebuild. That lack of competition gave us the illusion that our system was the best. Once Europe got back on its feet, however, they proved our way is not the only way.

Why would countries with greater wealth redistribution than the U.S. have greater economic growth?

It’s because disparity undermines prosperity.

Imagine an economy in which 80% of households can afford to buy a car. We’ll call this the low-disparity economy. Now imagine a high-disparity economy where only 20% of the households can afford a car, but 1% are extraordinarily wealthy. Will the superrich buy enough cars to make up for the rest of the population? They may buy more than they need, but not enough to make up for everyone who can’t afford a car. Even if they buy extra cars, will they drive them enough to keep as many mechanics busy as the low-disparity economy will? Not even close! The low-disparity economy will employ 4 times as many mechanics as the high-disparity economy will, because, in the low disparity economy, cars will be driven 4 times as much. The same goes for carpet cleaning. Since it only makes sense to clean carpets every so often, the superrich will not spend so much of their wealth on carpet cleaning that they compensate for the 80% of citizens who can’t afford it in a high-disparity economy. As disparity of wealth increases in an economy, fewer customers means fewer jobs needed to serve those customers, which means fewer opportunities for business owners. Without customers, businesses go bust. The healthiest economy is one that strikes a balance between investment money and the consumer spending money that makes those investments to pay off.

One of the most deceptive claims from the Republican gospel is that tax cuts for the wealthy are the best medicine for an economy; if we give the wealthy more money through tax savings, they have no choice but to create jobs with it. This is a lie. The wealthy have plenty of places to invest their money other than in business growth and job creation. When an economy suffers a demand crisis, the wealthy will not invest their money in creating jobs that create goods and service that won’t sell due to a lack of customers. They won’t hire more people to make more cars when they can’t sell the cars sitting on the lot. That would be no better than burning their money. In such times, the wealthy find it more profitable to sock away their tax savings in commodities (gold and oil futures – notice how much they go up in a bad economy), investment gambling (short-selling and derivatives) and high end real estate. These are not investments in business growth that create jobs and help the economy. These are simply exchanges of wealth between the rich as they play a financial game of King of the Hill. They effectively keep their tax savings out of the economy. This is why the Reagan-inspired trickle-down effect fails. Tax cuts for the wealthy are the worst possible economic stimulus in a demand crisis.

To track the effectiveness of various forms of economic stimulus, economists calculate what they call multipliers. A multiplier tells us how much our nation’s GDP grows within twelve months after the stimulus has gone into effect. For example, if the government spends one billion dollars and GDP increases by 1.3 billion over the next year, then the modifier has a value of 1.3. Calculating them is not an exact science, since many factors affect GDP, but they help us compare the effectiveness of various forms of economic stimulus.

 

 

Fiscal Stimulus Multipliers (As of the End of 2011)

Tax Cuts
Child Tax Credit 1.38
Earned Income Tax Credit 1.24
Tax Rebate (single check in the mail) 1.22
Spending
Food Stamps 1.71
Unemployment Insurance 1.55
Defense Spending 1.53
Infrastructure Spending 1.44

[Source: “Paying the Price” by Mark Zandi]

 

 

Notice that spending stimulates the economy more than tax cuts. The reason is simple. People who earn enough to pay their bills save their tax cut money rather than spend it and, thus, keep it out of the economy. When the government spends money, however, it does one of three things: it pays its employees, it buys goods and services from American companies who pay their employees, or it distributes it to low income earners and the unemployed who spend almost all of their income on necessities. Money spent by the government goes back into the economy (with the exception of foreign aid and foreign defense spending). The Tea Party acts as though the government ships our tax money into Pluto’s orbit never to be seen again. Taxation doesn’t remove money from the economy; it simply redistributes it, usually from those who hoard it to those who spend it in the economy. Redistribution of wealth, within reason, is great for the economy.

How God REQUIRED national wealth redistribution rather than making sharing with the poor optional

RedistributionofWealthDuringObamaPresidency123013

[The following excerpt is from my book, “Rescuing Religion from Republican Reason.”]

Biblical Taxation – Was it Optional?

When I share these passages with Tea Party Christians, they all tend to give me the same response. They say God’s tithes and taxes were optional, that it was up to the individuals to give out of the goodness of their hearts. To the contrary, Nehemiah 12:44 speaks of the tithes as being “required.” It says, “On that day men were also appointed over the chambers for the stores, the contributions, the first fruits, and the tithes, to gather into them from the fields of the cities the portions REQUIRED by the Law for the priests and Levites; for Judah rejoiced over the priests and Levites who served.” Also, God expresses anger, not at individuals, but at the whole nation, for failing to collect the tithes in Malachi 3:8-10, “Will anyone rob God? Yet you are robbing me! But you say, ‘How are we robbing you?’ In your tithes and offerings. You are cursed with a curse, for you are robbing me—the whole nation of you! Bring the full tithe into the storehouse, so that there may be food in my house, and thus put me to the test, says the Lord of hosts; see if I will not open the windows of heaven for you and pour down for you an overflow blessing [NRSV].”

Notice that the purpose of the tithe is “so that there may be food in my house.” God doesn’t need food. The food was for the Levites, widows, orphans, and immigrants, because they were unable to provide for themselves, since they had no inheritance of land. When the nation failed to enforce the collection of tithes, people created in God’s image suffered. The nation had robbed the needy; therefore, it had robbed God (“to the extent that you did not do it to one of the least of these, you did not do it to Me,” Matthew 25:45). God responded by cursing the nation, demonstrating that He held the nation responsible for not enforcing the tithes. He wasn’t disciplining individuals.

I’ve even had Tea Party Christians tell me the entire Law of God was optional, because the Jewish word for “law” had a different meaning than it does for us today, that it was merely a guide for virtuous living, not a legal requirement; therefore, God’s wealth redistribution system was voluntary, not mandatory. Here are some passages that disprove their point:
Deuteronomy 28:58-59…68, “If you do not diligently observe all the words of this Law that are written in this book, fearing this glorious and awesome name, the Lord your God, then the Lord will overwhelm both you and your offspring with severe and lasting afflictions and grievous and lasting maladies…The Lord will bring you back in ships to Egypt, by a route that I promised you would never see again; and there you shall offer yourselves for sale to your enemies as male and female slaves, but there will be no buyer [NRSV].”
Leviticus 26:14-17, “But if you do not obey Me and carry out all these commandments, if instead, you reject My statutes, and if your soul abhors My ordinances so as not to carry out all My commandments, and so break My covenant, I in turn, will do this to you: I will appoint over you a sudden terror, consumption and fever that will waste away the eyes and cause the soul to pine away; also you shall sow your seed uselessly, for your enemies will eat it up. And I will set My face against you so that you shall be struck down before your enemies; and those who hate you shall rule over you, and you shall flee when no one is pursuing you.”

Wow! That sounds pretty mandatory to me! Severe punishments like these don’t apply to optional practices. God held the nation of Israel responsible for its people’s obedience to His every command. If the nation failed to enforce His laws, His wrath against the nation would soon follow.

Finally, Tea Party Christians have argued (at least to me) that God’s wealth redistribution laws must not serve as an inspiration for American Christians, because they were religious laws rather than civil laws; and religious laws are forbidden by our Constitution. This is a point worth considering. However, biblical examination shows it to be incorrect. God’s system of wealth redistribution was property law, not worship or moral law. In the Bible, the breaking of religious laws (moral and worship laws) was punished either by death or by being cut off from one’s people. The breaking of injury laws was punished by eye-for-an-eye retribution. Unlike all of these, property laws had no punishments assigned to them as they were given in the Scriptures, but breaking them was most likely punished by no more than 40 “strikes,” a punishment given in Deuteronomy 25 that has no crimes assigned to it. Likewise, the tithes and requirements to share with the poor have no punishments assigned to them, so they qualify as property law. Property law and injury law constitute civil law, something that all civilizations enforce. Without civil law, a nation cannot function, nor can it be called a civilization. Religious law, on the other hand, is not necessary for a civilization to function, which is why many multi-religion nations flourish in the world today. Here are some examples of the different law types and their punishments:

Worship Law

Leviticus 17:8-9, “Then you shall say to them, ‘Any man from the house of Israel, or from the aliens who sojourn among them, who offers a burnt offering or sacrifice, and does not bring it to the doorway of the tent of meeting to offer it to the Lord, that man also shall be cut off from his people.”

Exodus 17:10, “And any man from the house of Israel, or from the aliens who sojourn among them, who eats any blood, I will set My face against that person who eats blood, and will cut him off from among his people.”

Numbers 9:13, “But the man who is clean and is not on a journey, and yet neglects to observe the Passover, that person shall be cut off from his people, for he did not present the offering of the Lord at the appointed time.”

For Christians, these worship laws no longer apply, because they were all part of the ceremonial way in which God’s people atoned for their sins in the centuries prior to Jesus Christ’s resurrection. Now, through Jesus’ sacrifice of His life on the cross, He became the perfect atonement for our sins. His sacrifice replaces the Old Testament sacrifices and ceremonies because, according to Hebrews 7:27, Jesus, the perfect and sinless Son of God, “does not need daily, like those high priests, to offer up sacrifices, first for His own sins, and then for the sins of the people, because this he did once and for all when he offered up Himself.”
Moral Law

Exodus 21:15, “And he who strikes his father or his mother shall surely be put to death.”
Exodus 21:17, “And he who curses his father or his mother shall surely be put to death.”
Exodus 22:18, “You shall not allow a sorceress to live.”
Exodus 22:19, “Whoever lies with an animal shall surely be put to death.”
Exodus 22:20, “He who sacrifices to any god, other than the Lord alone, shall be destroyed.”
Exodus 31:14-16, “Therefore you are to observe the Sabbath for it is holy to you. Everyone who profanes it shall surely be put to death; for whoever does any work on it, that person shall be cut off from among his people. For six days work shall be done, but on the seventh day there is a Sabbath of complete rest, holy to the Lord; whoever does any work on the Sabbath day shall surely be put to death. So the sons of Israel shall observe the Sabbath, to celebrate the Sabbath throughout their generations as a perpetual covenant.”

Leviticus 20:13, “If a man lies with a man as one lies with a woman, both of them have done what is detestable. They must be put to death; their blood will be on their heads.”

Leviticus 22:22, “If a man is found lying with a married woman, then both of them shall die….”

Deuteronomy 18:20, “But the prophet who shall speak a word presumptuously in My name which I have not commanded him to speak, or which he shall speak in the name of other gods, that prophet shall die.”

Notice that only one of these moral sins is illegal in America today, and that the vast majority of conservative Christians seek no government prohibition of the others (the only exception is the prohibition of homosexual behavior). This is because these laws, as well as the worship laws I covered, are religious laws, not civil laws.
Injury Law

Leviticus 24:17-20, “And if a man takes the life of any human being he shall surely be put to death. And the one who takes the life of an animal shall make it good, life for life. And if a man injures a neighbor, just as he has done, so it shall be done to him: fracture for fracture, eye for eye, tooth for tooth; just as he has injured a man, so it shall be inflicted on him.”
Exodus 21:16, “And he who kidnaps a man, whether he sells him or he is found in his possession, shall surely be put to death.” This qualifies as eye-for-an-eye punishment, because a person who is kidnapped and sold as a slave effectively has their life taken away from them.

 

 

Property Law

Exodus 22:3,7 “…A thief must certainly make restitution, but if he has nothing, he must be sold to pay for his theft…the thief, if he is caught, must pay back double.” [NIV]

Leviticus 19:9, “When you reap the harvest of your land, you shall not reap to the very edges of your field, or gather the gleanings of your harvest. You shall not strip your vineyard bare, or gather the fallen grapes of your vineyard; you shall leave them for the poor and the alien: I am the Lord your God.”

Leviticus 25:10, “You shall thus consecrate the fiftieth year and proclaim a release through the land to all its inhabitants. It shall be a jubilee for you, and each of you shall return to his own property, and each of you shall return to his family.”

The punishment: Deuteronomy 25:2-3, “…then it shall be if the wicked man deserves to be beaten, the judge shall then make him lie down and be beaten in his presence with the number of stripes according to his guilt. He may beat him forty times but no more, lest he beat him with many more stripes than these, and your brother be degraded in your eyes.”

Israel’s society could not have functioned without physically enforced property laws. It would have been anarchy. If these property laws had been optional, the thieves would have chosen not to pay back double, the landowners would have chosen not to share with the poor, and those who had purchased property would have chosen not to give it back to the families from whom they had purchased it, as was required in the Year of Jubilee. That’s the nature of greed. It keeps us from voluntarily doing what’s right. Thanks to this sinful nature, all of God’s laws had to be mandatory, not optional.

Does the fact that the property laws were not punished by death make them less important than moral and religious laws?

Not necessarily.

While the moral, worship, and injury violations cannot be undone or compensated in any way, property violations are the only violations in which the criminal can fully compensate the victim. For example, if a thief steals an ox, he can return it to the owner or replace it. If a landowner fails to tithe, he can be forced to give a double tithe next time. If a violator failed to make good for what he stole or damaged, he was sold into slavery in order to make restitution. Putting the violator to death would have made restitution far more difficult.

Why the Republican-Christian “Charity-only” poverty solution is both evil and ineffective

breaker boys
[The following excerpt is  from my book, “Rescuing Religion from Republican Reason.”]

The Charity Argument

How do Republican Christians avoid sounding like the devil while opposing a taxation system that redistributes wealth to the needy?

They promote charity as the sole solution. In other words, they believe that if mandatory wealth redistribution were abolished, the whims of the wealthy would meet the needs of the needy (which fails, thanks to the greed of the greedy). They make three major arguments as to why this is the better way.

First, for as long as I can remember, Republican Christians have made the claim that meeting the needs of society’s poor is the church’s job. But is this what the Bible teaches?

Let’s take a look at what the Apostle Paul wrote to young pastor, Timothy, on how to deal with the needs of impoverished widows in his church:

1 Timothy 5:9-10, “Let a widow be put on the list only if she is not less than sixty years old, having been the wife of one man, having a reputation for good works; and if she has brought up children, if she has shown hospitality to strangers, if she has washed the saints’ feet, if she has assisted those in distress, and if she has devoted herself to every good work.”

The Apostle Paul placed significant restrictions on who could depend upon the church for financial assistance. Widows who had not “washed the saints’ feet” didn’t qualify for church assistance. In other words, church assistance was prohibited, not only for non-Christian women, but even for women who were new believers and had not yet demonstrated that they were devout, committed Christians. This way, widows couldn’t pretend to be believers just so they could receive assistance.

Why was the church willing to only assist widows who were long-time members?

The next verse gives us a clue.

1 Timothy 5:16, “If any woman who is a believer has dependent widows, let her assist them, and let not the church be burdened, so that it may assist those who are widows indeed.”

First century churches were comprised of few wealthy people, probably because they and the wealthy didn’t see eye-to-eye. Therefore, many churches struggled to meet the needs of their members and could only support the neediest ones. That’s why Paul calls for Timothy’s church to seek out all other options to meet widows’ needs before “the church be burdened” by supporting them with the little bit of money the church had. Meeting society’s needs wasn’t even a consideration. While Christians are to help out where they can, nowhere in the Bible are churches called upon to be the solution for poverty throughout a society.

Furthermore, even if first century churches would have had more than enough money to care for their own, Christians made up such a small percentage of the Roman population that their public assistance would have had little impact. Likewise, in modern America, where Christians have made up a smaller and smaller percentage of the population over the past few decades, the church will likely become less and less of a financial resource in the future. Even 50-150 years ago, when Christians made up a much larger percentage of the population than they do today, church assistance failed to come close to meeting the needs of the poor. Had it done so, our nation would never have needed to implement assistance programs in the first place. The church failed to care for the nation’s needy then, and it will fail even more in the future, as its financial resources dwindle due to a declining number of members. Having the church support all of our nation’s poor is simply unrealistic.

Second, Tea Party Christians claim that taxation takes away opportunities for Christians to commit the righteous act of giving to the needy, since the money they might have donated is redistributed by the government, instead. Those who make this argument effectively admit the following: Like Jesus’ opponents, the Pharisees, they see God’s Law as a way to accumulate righteousness points before God; the Law is there to build them up, and their spiritual pride along with it. They think it’s more important that they increase their personal righteousness through charitable giving than that the needs of the needy be met. They would rather that needy children suffer malnutrition and live in squalor due to the ineffectiveness of a charity-only system than give up their opportunity to prove how righteous they are.

As I already revealed in the chapter on God’s Law, this is not Christianity. God’s laws exist for the well-being of people – for the common good. When it comes to our behavior, the Law protects others from the ill effects of our sins; it doesn’t reward our righteousness. The Law is other-centered, not self-centered. So if a mandatory system better meets the needs of the needy, we should be willing to give up opportunities to prove our charitable righteousness for those needs to be thoroughly met.

Third, conservative Christians are quick to point to huge dollar figures that prove how charitable we are as a nation. According to GivingUSA, U.S. charitable donations exceeded $300 billion in both 2007 and 2008 (but haven’t grown much since). That sounds like a lot—until you compare it to the 2.2 trillion dollars of annual U.S. social spending. So you could say the government’s forced donations equal approximately seven times as much as is donated through charity. Also, $300 billion in charitable donations (a significant amount of which pays for charity advertising costs – a problem government programs don’t have) pales in comparison to the $1.8 trillion that the wealthy invested in hedge funds in 2008. (Hedge funds specialize in short-selling stocks. Short-sellers borrow stocks from the stock owners’ brokers and trade them, so they contribute no capital investments to companies and are of no benefit to society.) So it’s not as if the wealthy give a large percentage of their riches to charity.

Of the money the wealthy give, only a small percentage of it goes to people in need. In fact, Americans earning over 1 million dollars a year give 66% of their charitable contributions to health, education and the arts, while 17% goes to religious organizations. If you look up the annual “America’s Top Donors” report at philanthropy.com, a quick scan of any year’s list will reveal the nature of charitable donations among the American wealthy. Less than 5% of the donations go to meeting the needs of the needy. The wealthy enjoy giving to universities, the arts, and special interest organizations more than they do to the boring poor people who need it most.

Charitable funding has been proven to fall far short of what government taxation can provide. An excellent example of this is the Commission for Relief in Belgium, a highly successful, well-funded charity that saved Belgians from starvation once Germany had cut off their food supply in World War I. It was created by Herbert Hoover (before he was president) who, throughout his career, championed charity and volunteerism and denounced government handouts. The charity got off to a great start and initially needed little government assistance. But as time passed and the needs of the Belgians persisted (thanks to the on-going war), Hoover had to turn to the U.S government for funds. When it was all said and done, 95% of the CRB’s funds had come from the federal government. Had charity alone supported the cause, as many as a million Belgians might have starved. And let’s not forget that this happened during the years in which few people paid income tax and the top marginal rate was only 7%. Anti-tax Republicans say that taxes keep the wealthy from giving as much as they would like. But we see here that even during the low tax years, charity came up short.

Why should we leave it up to the wealthy to determine who deserves charity?

Leaving the poor at their mercy is cruel. Republican politicians and pundits tell us the poor deserve no assistance, because they’re at fault for their poverty. They also say that giving to the poor makes them dependent upon handouts, so that they will become too lazy to work. They say this in opposition to welfare, but such a concept would be equally true for charity (not that it is true). I’ve even heard conservatives say that charitable food donations to Haiti have put Haitian famers out of business, as if charity fills Haitian bellies so much that Haitians desire to buy no more food from local farmers, because hunger has been eliminated from the land. If this is what the wealthy believe, we can be certain they’ll withhold assistance from the needy. All they’re doing is making excuses to hoard money. That’s why it’s much better to have a system in place where everyone who meets a standard requirement (like being unemployed or being of retirement age) receives aid, rather than leave it up to the whims of the wealthy to determine who receives aid, how much they receive, and when they receive it.

I challenge anyone to find a nation, past or present, that took care of its poor through nothing more than individual, voluntary charity, and did it as well or better than the United States has done through forced redistribution of wealth. Ancient Israel may have done as well or better, but as I’ve already demonstrated with numerous Bible verses, God forced them to redistribute wealth. A national system like this is the only method by which all people can be free from poverty. The voluntary charity solution promoted by Republican Christians rescues only a select few from poverty, and, as a result, has never come close to eliminating poverty in any nation in world history, including our own. Voluntary charity is a nice supplement to a mandatory national system, but it is not God’s preferred weapon against poverty. God refused to rely on voluntary charity to meet the needs of the needy, because He understood the nature of greed all too well.

The Tea Party Paradise

Republicans, especially those of the Tea Party persuasion, tell us that if we were to greatly reduce taxation and get rid of welfare, and maybe even Social Security and Medicare, that America would fulfill its potential and our lives would be so much better. To these people, I ask, “Where in the world is this working?” Most of the nations that have been capitalist for a long time (i.e., since World War II) have higher tax rates and larger welfare states than we do. This includes Germany and Japan, whose stock markets were annihilated by the war, and yet they have since greatly prospered in a matter of decades. However, there is one nation that does have a significantly lower overall tax rate and smaller welfare state than we do. It’s Mexico! Here are some numbers:

Total Taxes as a Percentage of GDP
*******Mexico       United States    Canada       U.K.       Sweden
1985     15.5%              25.6%                  32.5%           37.0%        47.4%
1995     15.2%              27.8%                  35.6%           34.0%        47.5%
2000    16.9%             29.5%                  35.6%           36.4%        51.4%
2009    17.5%              24.0%                  33.1%           34.3%        46.4%
[Source: OECD Tax Revenue Statistics]

Gross public social expenditure as a percentage of GDP, 2001
Sweden 35.1%
Denmark 34.2%
France 33.0%
Germany 30.6%
Austria 29.6%
Italy 28.3%
Belgium 28.0%
Finland 28.0%
Norway 27.0%
United Kingdom 25.4%
Netherlands 24.3%
Iceland 23.4%
Czech Republic 22.2%
Spain 21.7%
New Zealand 21.1%
Canada 20.4%
Australia 20.4%
Slovak Republic 19.8%
Japan 18.5%
United States 15.7%
Ireland 15.3%
Korea 7.1%
Mexico 5.7%
[Source: OECD/Statistics]
Many opponents of social government spending say people work harder if they can’t get handouts from the government. Apparently, the statistics bear that out:

 

Average number of hours worked per year per capita
Mexico      2250
U.S.            1787
Canada    1702
U.K.           1625
Sweden   1644
[Source: OECD/Statistics]
Mexico is the Tea Party paradise of low taxes, little social spending, and hard work. Yet, many Mexicans are willing to risk their lives to illegally come to our country. Why? Perhaps because Mexico has the highest poverty rate of the 34 OECD countries, the 2nd highest degree of income disparity (after Chile), and the 2nd lowest life expectancy (Turkey is #1).

One might argue that Mexico is a third world country. But is it? It’s the 13th largest economy in the world, and it had a 30-year post-WWII economic boom known as the Mexican Miracle. Its economy was much better in the 1960s and 1970s than it is today. But then, Mexico chose a different path than the United States did. It did little to create a system that shared the nation’s prosperity with the population at large. It also collected insufficient tax revenue to the point where it was unable to pay its debt in the 1980s and had to print money to pay it; thus, Mexicans endured several years of 100% inflation, which peaked at a rate of 160% in 1987. The every-man/woman/child-for-itself approach has been a disaster for Mexico. That’s why it looks like a third world country, despite being a large economy.

Republicans might argue that Mexico’s economic history differs from that of the U.S., and that other factors affect these numbers. Naturally, in economics, there are always other factors to consider. For example, Mexico owns its oil industry. That’s socialism (Mexico’s other industries are mostly free market, however). Contrary to what Fox News might tell you, socialism is the opposite of taxation. A nation that insufficiently taxes private wealth must compensate by owning businesses that generate revenue from profits. A nation that mostly owns nothing, like the United States, must rely on taxation of private wealth to pay its bills. Mexico’s reliance on oil industry profits rather than taxation of private, free market wealth had devastating effects on its budget when oil prices fell in the early 1980s.

Republicans may also argue that Mexico’s poverty stems from corruption. In doing so, they place the cart before the horse. Poverty causes corruption, and corruption is greatest where poverty is worst. When people have no hope of earning a dignified living legally, they often do it illegally. Breaking the law is their only shot at relief. For some it’s drug crime, for others it’s business corruption, and for some it’s becoming an illegal alien in a neighboring country where life is better all around.

Nonetheless, there is no place in the world today where the Tea Party agenda works. Some will argue that it worked in the late 1800s and early 1900s, but the anarchist movements and the violent labor disruptions of that period, both in America and throughout Europe, proved otherwise. The people couldn’t bear their poverty and oppression, so they eventually voted away the oppressive ideology that the Tea Party calls righteousness.

By the way, how has charity worked as a solution for Mexico’s poverty?

Not only are there some very wealthy people in Mexico, but Mexico is next door to the wealthiest nation in world history. Eradicating Mexican poverty through charity should be a cinch. Yet, Mexico has the worst poverty of the 34 OECD nations. It looks like charity has failed them, as it has every nation in world history.

Here in North America, we’ve had three nations greatly benefit from the post-World War II era, during which the rest of the industrialized nations were at a disadvantage, since they needed decades to fully rebuild. The United States, having been an industrialized nation for the longest amount of time prior to the war, benefitted the most. But it’s now losing ground to Canada, whose median household income has surpassed that of the United States as of 2014. Quality of life for the working class in Canada is now better than it is here. That’s because Canada has chosen a system in which the rich pay higher taxes, and more of the nation’s wealth is shared with the working class through higher social spending. Mexico, on the other hand, chose the opposite direction of low taxes, low social spending, and a charity-only solution for the poor, and the results have been disastrous. Liberals want us to be more like Canada. Conservatives want us to be more like Mexico. We have a choice to make. Let’s hope we make the right one.

The Biblical Case for Progressive Taxation

progressivetax

[The following excerpt is  from my book, “Rescuing Religion from Republican Reason.”]

 

Does a Secular Government Have the Right to force Wealth Redistribution?

Since we Christians tend to bury our heads in the New Testament and neglect the Old Testament, we ignore God’s design for the nation of Israel and build our entire poverty relief theology out of Paul’s statement to the Corinthian church in which he says, “Each of you must give as you have made up your mind, not reluctantly or under compulsion, for God loves a cheerful giver [II Corinthians 9:7 – NRSV].” Republican Christians use this Bible passage to oppose taxation even more than the one in 1 Samuel that I quoted earlier. Out of context, it appears to command that we are only to share our wealth with the less fortunate if we really want to; no one has the right to force us to share.

Like most of the New Testament, this statement addresses a specific church crisis and individual Christians, not a government. It’s not an anti-taxation statement. Rather, it encourages those who already pay taxes to give out of their take-home pay as they see fit (the Romans paid taxes, too, so their situation differs little from ours). This verse lacks political value since it addresses individual hearts rather than government laws. (By the way, if you read all of Corinthians 8 & 9, you’ll see that Paul placed a lot of pressure on the church to share its wealth. He was not sending the message that the church should have done whatever it felt like doing. He used tact by appealing to their generosity rather than commanding them. He wanted them to feel good about giving rather than give while resenting Paul for commanding them to do so.)

As many Bible believers will tell us, we must use the Bible to interpret the Bible. We cannot pull one verse out of context without looking at what the rest of the Bible has to say on an issue. Unlike the “cheerful giver” verse, Romans 13:5-7 actually does address taxation, saying, “Wherefore it is necessary to be in subjection, not only because of wrath, but also for conscience’ sake. For because of this you also pay taxes, for rulers are servants of God, devoting themselves to this very thing. Render to all what is do them; tax to whom tax is due; custom to whom custom; fear to whom fear; honor to whom honor.” The government has the right to tax its citizens, and we must pay taxes whether we like it or not. Our cheerfulness is not a prerequisite. Although I can’t help but think that God loves a cheerful taxpayer, too. If we’re fighting mad that we have to pay taxes, we probably love our wealth more than we love God and others.

Jesus also supported a secular government’s right to tax its people in a well-known quote from Matthew 22:15-21: “Then the Pharisees went and counseled together how they might trap Him in what He said. And they sent their disciples to Him, along with the Herodians, saying, ‘Teacher, we know that You are truthful and teach the way of God in truth, and defer to no one; for You are not partial to any. Tell us therefore, what do You think? Is it lawful to give a poll-tax to Caesar, or not?’ But Jesus perceived their malice, and said, ‘Why are you testing Me, you hypocrites? Show me the coin used for the poll-tax.” And they brought Him a denarius. And He said to them, ‘Whose likeness and inscription is this? They said to Him, ‘Caesar’s.’ Then He said to them, ‘Then render to Caesar the things that are Caesar’s; and to God the things that are God’s.’”

Tax opponents will argue that this passage isn’t about taxation. But is that entirely true?

Here’s the context: The Pharisees expected Jesus to answer by saying it’s a sin to give a percentage of one’s income to anyone but God, and that to pay a tax to the emperor is to submit one’s life to him in an act of worship, making the emperor out to be a god. They brought government officials with them, so they could have Jesus arrested for opposing the government tax. Jesus didn’t just give them a fancy answer, though, as many Christians suppose. Rather, He revealed truth they did not expect – that paying taxes is not worship, and that the government has rights over the money it produces. Money is not one of the “things that are God’s.” It is a human invention. Without the government, we have no money. We might have some shiny rocks or bags of rice to barter with, but we wouldn’t have bills or coins. Such an economy would be very primitive and wealth accumulation would be difficult.

So the Ron Paul website statement, “An income tax…suggests that the government owns the lives and labor of the citizens it is supposed to represent,” is anti-biblical. The government that creates money for us has the right to tax it, but in no way does taxation imply that the government owns the taxpayers. Also contrary to Ron Paul’s libertarian claims, the Bible shows that taxing income percentage is the godliest method of taxation. God’s system employed no excise taxes or sales taxes (like the Fair Tax), probably because they burden the poor more than the rich. To say that taxing a percentage of income is evil is to say that God is evil. And to say that a sales or consumption tax is more righteous than income tax is to say that humans are more righteous than God. If there’s any tax we should fight against on a moral basis, it’s sales (consumption) tax, not income tax.
Progressive Taxation

Not all Republican Christians will dispute what I’ve shared thus far. They’ll agree that taxation is necessary, and that having a system to meet people’s needs aligns with God’s will. But progressive taxation, in which wealthier people pay a higher percentage than poorer people, is where they draw the line. They label progressive taxation as “unfair” and, therefore, “stealing.” Some even call it a “punishment for success.” And they point to the very same Bible passages I’ve already shared as proof that everyone in ancient Israel paid the same percentage of their income. At first glance, this argument holds up well.

If our society were structured like that of ancient Israel, I would agree that a flat tax would be the way to go. But our society differs from theirs. And it’s these differences that I believe justify a progressive income tax. Here are the justifications:

1) The Bible actually did have a progressive system. But it only had two tiers. Those who inherited land paid; those who lacked land did not. As I stated before, our society is more complex. American citizens are scattered across a broad spectrum of income levels. Therefore, it makes sense to have a progressive marginal tax rate system. A two-tiered biblical system would be impossible to implement, because there’s no sole criteria by which we can draw a line between the haves and the have-nots.
2) Ancient Israel did not have a system of corporate liability protection that legally stole from society, through bankruptcy, to enrich the wealthy. It’s only right that we balance this injustice with a progressive income tax system that takes money back from the wealthy to share with society. If our system can amplify disparity of wealth, then our system can be modified to lessen that disparity. And if society can be forced to bear the debts of the wealthy, it’s only right that society be entitled to share in their gains.
3) Wealth was far more evenly distributed in ancient Israel. Approximately 95% of Israelites owned land on which they could grow food, build houses, run businesses, and raise their families. In America, prior to the establishment of the Federal Housing Administration (FHA) in 1934 and Fannie Mae in 1938, only about 40% of Americans owned land. With 95% of ancient Israel’s population having similar wealth, a progressive system among taxpayers would have made little difference.
4) America does not have a Year of Jubilee to minimize its disparity of wealth, like ancient Israel did. Thanks to the Year of Jubilee, no one could acquire a lot of land, because it had to go back to the family who originally inherited it within 50 years. With limited land in an agrarian society, one’s ability to produce a family fortune was also limited. When ancient Israel adhered to God’s system, it lacked the disparity of wealth that America has today. Once they moved away from the system, however, and were ruled by kings, some of them, like Solomon, amassed great wealth and disparity increased.
5) Many American corporations grow wealthy through deceiving customers and sneak-charging. Others encourage their sales reps and marketers to lie. Even those who don’t still benefit from deception, because nearly all sales departments contain some liars. Meanwhile, some businesses engage in the deception of what I call salary slavery. They hire prospective employees on a salary instead of an hourly wage while telling them they’ll work a 40-45 hour week, and then they work them 60-70 hours a week while paying them no additional money for the extra hours worked. All of this is stealing. The government cannot micro-manage businesses enough to eliminate all of this deception. But it can tax corporate owners who benefit from it at higher rates and give some of their ill-gotten gains back to society.
6) If business owners make millions, then it stands to reason that they either underpay their employees and/or overcharge their customers. In other words, they fail to share with those who made them successful. Who’s to say that paying employees the minimum necessary to fill the position is righteousness? Perhaps righteousness is to pay them according to their contribution to the company’s success. Or perhaps it’s to pay them enough to support their families.
7) America, in a time of military crisis, can draft the lives of low income Americans to keep America safe and stable enough for the rich to prosper. It’s only right, then, that America can draft the excess wealth of the rich when the American soldiers and families who made such sacrifices find themselves in financial crises. Every family that’s been here awhile has sacrificed sons, daughters, mothers, fathers, sisters and brothers to the protection of the common good. And they may be called to make similar sacrifices in the future. America is a group effort. Yet, when the wealthy are confronted with progressive tax rates, some of them cry, “I did it all myself. I owe them nothing.”
8) Last, but certainly not least, progressive taxes are merciful:
Mercy Rates

Republican economists have argued that the rich and the poor should pay the same income tax rate, because poor people don’t stay poor from year to year and the rich don’t stay rich. They’ll site statistics that show a large number of people moving out of the bottom income quintile (the bottom 20% of income earners) into higher quintiles (even though there’s little income difference between the bottom and middle quintiles – those in the middle quintile struggle, too). These stats look this way, because many young people start with minimum wage jobs while still dependent on their parents during their high school and college years, then get better entry level professional jobs after college, and then some move up the ladder in their fields and their pay increases. However, not all low income earners move up the ladder, and not all can depend on their parents. In fact, some have children depending on them, so they can’t afford to pay the same tax percentage as the rich. In fact, without welfare assistance, they may not live long enough to have a chance to move to a higher quintile.

My first year after graduating college, I had an entry level job that paid just a little above minimum wage. I struggled to afford my studio apartment in an impoverished part of Nashville. I had student loans, a car payment (because I needed to get to work), and I had no furniture. I remember having nothing but bread and butter for dinner, because it was all I had in the refrigerator until payday. I would walk for exercise, because I couldn’t afford a gym, and I walked for 4 months with holes in the bottom of my sneakers, feeling the pavement with every step, before I finally saved up enough money to buy new ones. I found myself poor, despite all of my hard work, education, and total avoidance of drugs, alcohol, and even cigarettes.

Having studied economics in college, I was aware of flat-tax proposals to establish a rate of approximately 20% federal withholding tax for all people. I had previously favored such a tax, because it was fair. My experience in poverty shattered that view. There’s no way I could have afforded 20%. I would have had to give up heat, food and electricity in order to afford a flat tax. I then realized that lower tax rates for the poor are acts of mercy, or as I call them, mercy rates.

Conservatives may argue that I eventually escaped poverty and moved out of the lowest tax bracket. In fact, ten years later I owned a ranch house on 3 acres of land and enjoyed nice vacations and Eagles season tickets. But could I then build a time machine and go back ten years to my former self to share my money with him? Obviously, not. When I was poor, the fact that I might someday earn more was of no consequence to my survival at the time. I needed a mercy tax rate, and fortunately, our progressive tax system gave me one, so I could live to see better days.

Republicans look at the progressive tax structure backward. They see the low rates as the standard rates and the high rates as penalties for the rich. The truth is that the rich pay the standard rates, and the poor get mercy rates, since they cannot afford the standard rates. If the nation is going to tax its wealth, it will have to tax the people who earn that wealth; so the standard rate is the one that taxes most of the wealth, not most of the people. According to the 2010 Summary of Federal Income Tax Data, the top 1% of income earners earn 18.9% of the nation’s wealth, the top 10 % earn 33.8%, the top 25% earn 67.6% , and the bottom 50% earn only 11.75%. So the bottom ½ of the population earns less than 1/8th of the money, but the top 25% earns 2/3 of the money. It’s this money and these people who should pay the standard rate. Although, to be fair, the poorest of the top 25% only earned $69,126 in 2010, which isn’t a whole lot of money when trying to raise a family, so they deserve a little mercy in their tax rates, too. And that’s exactly what we do. We have a progressive tax structure that extends different levels of mercy to different income brackets. The poorest receive the most mercy, and the wealthiest receive no mercy because they lack nothing. Of course, since such a large percentage of the population gets mercy rates, the wealthy have to be taxed even more to cover the poor’s share. If our disparity of wealth wasn’t so great, our tax rates wouldn’t have to be so progressive.