Magazine article Sojourners Magazine

Shrink, Shift, & Shaft: Bush's Tax Policy Is Aimed at Drastically Reducing Government Services and Moving the Tax Burden to Poorer Wage-Earners. the Result: A Case of "Trickle-Down Injustice."

Magazine article Sojourners Magazine

Shrink, Shift, & Shaft: Bush's Tax Policy Is Aimed at Drastically Reducing Government Services and Moving the Tax Burden to Poorer Wage-Earners. the Result: A Case of "Trickle-Down Injustice."

Article excerpt

Facing budget shortfalls in Arizona, a leading state senator announced that legislators were reviewing all state spending and that "nothing was sacred."

But the religious coalition Protecting Arizona's Families responded, "Is nothing truly sacred? What about state programs for the hungry, homeless, and mentally ill children? Do they stand on the same moral ground as subsidies for corporations? And why won't we consider raising taxes on the wealthy before we cut programs on the poor?"

Active Christians and other people of faith are accustomed to weighing in on the morality of public spending and budget choices. Much of our recent attention has been focused on how our tax dollars are being used to advance an imperial foreign policy.

But we should also be alarmed at the changes being legislated to reshape the way out government raises money through federal and local tax systems. Federal tax cuts in 2001, 2002, and 2003 have fueled massive deficits and blocked possibilities for spending on human needs. These tax cuts have "trickled down" to worsen state and local budget deficits, forcing deep cuts in spending on poverty, health care, and education. Almost every state has been plunged into its worst budget crisis since World War II. According to the Center on Budget and Policy Priorities, states are facing budget gaps totaling $85 billion in the coming year.

As a result, localities have laid off teachers, firefighters, police officers, and social workers, closed libraries and health clinics, cut childcare, mental health services, public transit, and pollution control, raised public college tuition and reduced financial aid, and let schools, playgrounds, roads, and bridges go unrepaired. Oregon shortened its school year by three weeks. Thirty-four states have cut spending on Medicaid and the State Children's Health Insurance Program over the past two years, removing between 1.2 million and 1.6 million low-income people from health coverage, including an estimated 490,000 to 650,000 children. The list goes on.

Most state and local taxes are highly regressive, imposing a higher burden on the pour than the wealthy. According to the Citizens for Tax Justice, the average state and local tax rate for the bottom fifth of income earners is 11.4 percent, more than twice the rate paid by the richest 1 percent of taxpayers. In some states, such as Washington and Florida, the poorest fifth of taxpayers pay as much as 14 percent of their income; the wealthiest 1 percent pay less than 3.5 percent.

These states practice the opposite of the "preferential option for the pour." Some states--such as Alabama, Tennessee, and Virginia--tax food and basic needs at a higher rate than income from investments. State and local sales taxes on items such as food take a larger percentage of the income from the pockets of the pour, making the state systems more regressive.

In the gospel of Mark, Jesus watches as people contribute to the treasury. He observes that the widow "put in more than all the contributors to the treasury; for they all put in out of their surplus, but she, out of her poverty, put in all she owned, all she had to live on" (12:41-44). This distinction underlies the moral basis for a progressive tax system: Those with the greatest capacity to pay should pay a higher percentage. Ten percent of the income of a person with a $10,000 income cuts into their basic sustenance. Ten percent of the income of a person with a $1 million income does not.

THESE DIRE BUDGET straits are largely the result of political and moral choices. In addition to factors such as recession, war, and increased prescription drug spending, many states during the 1990s gave away massive tax breaks to corporations and the wealthy. Some states are reversing these tax giveaways, but most politicians are afraid to restore some of the tax cuts made in fat times. Rather than set aside adequate funds for the lean times, states have irrevocably returned these revenues to the political donor class. …

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