The WSJ Op-Ed page has a fascinating story today on the battle over the discussion of the flat tax in Utah. For those of you whose eyes glaze over at the discussion of taxes and economics, I promise this post will try to make that subject interesting. But this post will also discuss the WSJ’s attitude toward the Church and the Church’s influence on public policy-making.
First point: I hadn’t heard about this subject until I picked up the WSJ this morning. I’d be interested to hear input from people in Utah who have been following the flat tax debate. I’d also be interested in input from people with knowledge of economics and their opinions on the flat tax.
To summarize: the mostly conservative Utah legislature was considering a completely flat tax on state income. I presume this to mean that all income would be taxed at a flat rate, say, 1 or 2 percent, regardless of your income level. But to make a flat tax work, you must get rid of deductions, which include things like your mortgage interest, your property taxes and your charitable deductions.
Enter the Church. The Church made it clear that it is in favor of keeping charitable deductions. The article makes it appear that lawmakers immediately caved because 80 percent of the state legislators are members of the Church. The flat tax appears to be dead.
In the print version of the WSJ, there is a cartoon from the Salt Lake Tribune that speaks directly to the issue of Church influence in Utah state politics. There is a cartoon of the state legislature with legislators saying they are in favor of the flat tax (“Brilliant!”) until the Church says it is opposed, and then the legislators immediately kowtow to the Church position, changing in an instant to “Whose stupid idea was that?”
I think the issue is much more complex than that. The Church and almost all churches in the U.S. support the idea of deductions for charitable contributions. We as a society have historically supported this idea because churches perform an important societal function. Getting rid of deductions would set a dangerous precedent.
And, surprisingly, the WSJ article bends over backwards to support the Church viewpoint. Instead of joining the chorus of commentators anxious to criticize the Church, the article makes the point that: “While it might be easy to blame opposition to a pure flat tax on the voracious needs of special interests, the Mormon Church rightly understands that the tax code should be used to incentivize individual and societal behaviors that help us to be our better selves and, at the same time, serve to unburden our reliance on government programs.” The article makes the point that the real problem is out-of-control state spending, not Church meddling.
I’m sure the world will be filled with snarkers laughing it up at the Church’s expense on this issue. But it is naive and laughable to suppose that the Church should stay silent on an issue this important. Deductions for charitable contributions are essential to the Church’s continued operations and have important public policy benefits. Why should the LDS Church or indeed any church in Utah not speak out on the issue?
It is worth pointing out that on a national level there is no thing as a completely flat tax. All of the major flat tax proposals have included continued deductions for mortgage interest and property taxes, for example, and some have included continued deductions for charitable contributions. A completely flat tax simply doesn’t have political support.
The most curious thing to me about the church’s opposition to a flat tax is that the church uses a flat tax! If it’s good enough for God it seems it should be good enough for us.
Isn’t the law of tithing a lot older than the charitable deduction? Are you saying that the church depends on the chraitable deduction because people would not give to the church unless they could get the tax break? This idea seems to me, well, naive and laughable.
I wan’t going to read this but since you promised to make it interesting for people like me whose eyes glaze over, I did procede.
Preface this by saying that I have never taken a course in Economics.
I understand what people mean by small government and as a whole statistics show that conservative give more to charities than liberals do at least according to a study that I heard some years back. Whether it still holds true, I am not sure.
If people are taxes less and would in turn use some of this disposable income for greater societal issues such as education, healthcare, and medicine. I guess I am speaking of more privitation. In the end, if government could cut back spending in these areas and these organizations were run more efficiently by private organizations than we would be ahead.
This would require a huge overhall of government agencies with layers of inefficency that go from one administration to the next and are not directly effected by elections. A curtailing of all the fleecing of America with mass fraud of the system from medicare fraud and inflated prices may yield quite a surplus. In effort to cut, we need to be careful not to leave those who are truely in need in a state where they will be suffering.
The argument for charitable deductions is that the contributed funds substitute for expendtures that would otherwise have to be undertaken by the government, and that the individual contributors can allocate those funds more efficiently than the government can. That rationale works fine for fast offerings and contributions to the humanitarian and perpetual education funds. If the church were not spending these funds, domestic welfare and foreign aid expenditures would be higher and arguably less efficient.
But would anybody seriously argue that the missionary fund substitutes for expenditures that the government would otherwise make? As for tithing, perhaps the chunk directed to BYU might substitute for some government expenditures, but the portion directed toward temples and meeting houses certainly does not. I don’t know how you do it administratively, but there is a valid economic argument for limiting the deduction for contributions to a church’s general operating fund.
The above post belies my very liberal upbrining that still causes me to lean to the left some. So I counter with this statement.
When President Clinton was talking about increasing the tax rate for those who were in the higher brackets, my grandpa was quoted in the Des Moines register that he was willing to do his part. We found out when my grandpa died that he had been extremely generous with his money through the years giving to many charities. I think that a lot of people are for social programs that are run by government because of a concern for their fellow man.
Editorial comment that is only loosely related: Presdident George W. Bush has supported giving money directly to Church based groups. To me, this seems like a violation of the separation of Church and State. Now if it is just as my local Catholic Parrish did and used government funding(not necessarily from the new programs) to provide meals to neighborhood children during Summer months when school is closed, it seems well spent.
However, I saw a segment on a news show a couple of years ago or so where(Frontline, I think) where a group subsidized by the government would work towards giving a struggling parent help but in turn they would extend an invitation to go to their Church. They said that God is the best way to help the person. Now the help was not directly tied to this obligation but imagine the pressure that you feel when taking a hand out from people. Even my cousin who is so anti-religious having been raised with no religion has made an occassional appearance at a Church to thank them for helping with a bill.
I meant my above post although it was rather in line with Last Lemming’s too. 🙂
I think that my thinking is also in line with Eric S. I tried to claim my tithing once and was told that I did not donate enough. I think that was when I was still working part-time as a student. I have never checked into it since. It felt like cheating to me to claim my tithing. I did not realize the Church felt so strongly in this regards and this does cause me to re-examine. That may take some time.
I don’t imagine that disallowance of tax deductions for gifts to charity would stop most Mormons from paying tithing or other offerings to the church. When the church issued the statement about the proposed flat tax in Utah, it made the same point–they weren’t taking the position to protect the revenues of the LDS church, but to protect other charities, the arts, etc., whose revenues they suggested would be hurt by a loss of the tax deduction.
War Worn: If you consent to someone’s taking some of your property, you cannot afterward claim that it was stolen. You have consented to the taxation of your property and income by the government–through your duly elected representatives in congress and the state legislature. If you think that taxes are too high or unfairly assessed, you may vote for representatives who will promote your views. If you and your views lose: Tough. That’s the price you pay for living in a democratic republic, and your continuing to live here is an indication of your consent to government by a majority of your fellow citizens.
If you don’t like it, you’re free to move to some state or country with a tax code more to your liking. Or to die. Because, though death and taxes are the proverbial certainties in life, it does appear that once you’re dead you’ll no longer have to pay taxes on this earth. (Your survivors may be required to pay estate or inheritance taxes, but that’s their problem, not yours.)
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I don’t know that is the definitive justification of charitable deductions. Other reasons would include:
* charities eliminate the problems now absorbing government’s spending (e.g. mighty change of heart reducing murder, theft, war, rape, drug addiction, welfare, unwanted pregnancy, and littering),
* recognition that the populace is willing to receive reduced government services in exchange for increasing the value received from churches, arts, and education that the government cannot provide,
* belief that it’s better to maximize voluntary contributions to society’s betterment and reduce “contributions” induced by threat of incarceration and confiscation, and
* legislators self-interest manifest in increasing their re-electability by supporting these deductions.
Eric S. wrote: “Are you saying that the church depends on the chraitable deduction because people would not give to the church unless they could get the tax break? This idea seems to me, well, naive and laughable.“
Before JFK’s tax cuts, the highest marginal tax rate was above 90%. I don’t think it’s logically possible to pay 10% of your income to the Church and over 90% of your income to the government.
Before JFK’s tax cuts, the highest marginal tax rate was above 90%. I don’t think it’s logically possible to pay 10% of your income to the Church and over 90% of your income to the government.
Because 90+% was a marginal, not an average rate, it is logically possible to pay both that and tithing. But I won’t bore you with the math unless you absolutely insist.
Furthermore, even if they were average rates, one could simply pay tithing on income net of income taxes. In the absence of a charitable deduction, I think that would be justified.
The Church’s stated desire to protect other charities, etc. is commendable, but it would be foolish to believe the Church is not also motivated by self-interest.
Can you say “Regressive Tax”? That’s really what is should be called.
Yet the biggest expansion in govt happened under Bush when he created the Homeland Security Dept.
Actually, the Medicare prescription drug benefit represents a far larger expansion. DHS was primarly rearranging deck chairs, although one of those deck chairs, namely TSA (which had already been organized under the Department of Transportation) was a pretty big expansion too.
And I’m sure the county would be much better off if the goverment would let me (not to mention assorted terrorists) hire my own security screener at the airport instead of stealing my money to hire its own. 🙁
“You have consented to the taxation of your property and income by the government–through your duly elected representatives in congress and the state legislature. If you think that taxes are too high or unfairly assessed, you may vote for representatives who will promote your views. If you and your views lose: Tough. That’s the price you pay for living in a democratic republic, and your continuing to live here is an indication of your consent to government by a majority of your fellow citizens.”
I think War Worn is all wet. But so are your arguments from consent. Look at it from his perspective. A massive, irresistible conspiracy extracts money from him by the threat of force. Does not fleeing mean that the whole thing is voluntary? Is extortion not extortion if the shopkeepers don’t close down?
No, government by consent is mostly a fiction and, at most, a partial truth.
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Tithing is regressive, not flat, in a society with both charitable deductions and marginal tax rates that increase. The last $100 of tithing costs $100 from people that either pay no tax or don’t qualify for charitable deductions but the last $100 of tithing costs only $59 from someone in the marginal 41% (fed + state) tax bracket.
What if the Church asked us to gross-up our tithing to pass on the tax savings to the Lord, which would make it a flat 10% across the membership?
War worn sees the light. I wish more Mormons did.
The light of dillusional sociopath is the only thing he sees. Government by consent has been going on for hundreds of years. The simple fact of the matter is, by LIVING in a country – you consent to be obligated to obey all its laws and restrictions, since you receive all of the inherit benefits from said government. If you don’t like it, you can leave and change your citizenship, erasing all of your obligations to said country. However, as long as you live in the US, you benefit from their systems of defense, healthcare, etc. etc. Before you start spouting off about how it doesn’t pay for your healthcare, the simple fact that healthcare is available to our poorer citizens creates a healthier environment – one where you are much less likely to get as a result. The list goes on and on of the benefits you receive, and as of this point in human development, taxes are the only way we have discovered that work to pay for such a massively expensive system. Perhaps if you have better ideas, you could go start your own country somewhere, and finance your government off of something other than taxes. Until then, enjoy and support the government that the Lord established in the promised land.
Tithing can only be seen as regressive when combined with other tax forms. By the very definition of a flat tax, the end result is neutral. A progressive tax, however, is one which a person pays more taxes, AS A PERCENTAGE OF HIS/HER income the more money made. A better example of a regressive tax is the sales tax, as poor people spend a greater percent of their income, as such, they are taxed at a greater rate as a percentage of their income.
As for consent, their are numerous political philosophers who have discussed what actually involves consent, both tacit and implied. My personal view is that a person who knowingly votes is giving tacit consent. However, one who enjoyes the benefits of government (security, etc), are giving implied consent by consuming the resources of the state. One who does so and insistes in not contributing back is a free rider…a parasite on society and should not be complaining about what they are too ignorant to understand
A few things:
The church’s intervention into non-moral issue public policy stuff is embarrasing and good for the WSJ to make fun of us when we look stupid.
I’m a bit perplexed by the “debate” since I’ve never lived in a state were mortgage interest, property taxes, charitable deductions, etc were deductable. Those have only been Federal deductions for me.
Most Flax tax plans are mismnamed since they start a threshold level. So there are two rates, zero to the threshold amount and a flat rate thereafter.
Since tithing is 10% of one’s increase and the church wisely hasn’t issued a tithing code for calculating increase, tithing isn’t necessary regressive. I’m aware that many local leaders will insist it’s 10% of one’s gross salary, period. But that is thier unrighteous dominion, not church policy as discussed in conference. Being self employed, for example, I pay 10% of what I draw from my business, which is somewhat less than 10% of an employee’s gross salary due to expenses that employee had in earning that salary. In my case, those expenses are covered by my business.
The thing that I’ve always been impressed about is that most people who object to taxes drink milk — even though that is part of a market created and preserved by the government. They drive on roads, they expect others to obey traffic laws, and they drink water and use the toilets in their homes, participating in the common network.
Now there are kids in Northern California who show up at school never having had a haircut, never having used a toilet or a sink, who have lived somewhat in a feral state until then.
But most people who use the internet (again, created by the U.S. government) are not otherwise feral.
As for charitable deductions … most Churches fear that if those go, then the exemptions from other taxes will go, property taxes being the most obvious.
So, why not go back to the standard of living in America before WWI? Interesting question.
Why not abolish taxes on gasoline and let the highway infrastructure completely collapse (the gas tax trust funds being one of the few that actually work as advertised)?
Interesting questions, all.
The United States of America is a company. Everything within the United States is the land, or territory, of the United States. When one steps onto company land, aka over the US border, one consents to the rules and laws that that company creates. In order to live and work on company property, one must become an employee of that company. A portion of your increase then goes to the company to which you belong to. If you decide to leave the company, than you must vacate the company property. You cannot continue to work on company land when you no longer share a portion of your profit with the company at large, if that is the policy of the company. It is not theft. In fact, it is theft on your part to use company land to your profit when it does not belong entirely to you, just as it would be theft for me to come to your house, till your soil, plant, harvest, sell the goods gained from that, and then refuse to allow you to so much as walk on the soil which I used for my little farm, despite the fact that it belonged to you. The fact of the matter is, nothing -fully- belongs to you, just as nothing you do affects you alone. Anything an individual does effects someone or something around them. As the saying goes, a butterfly flapping it’s wings in Tokyo causes a hurricane somewhere else (don’t remember where exactly). You want to drive your car? Well that car has to drive on something, which wears down whatever it’s driving on, eventually making it undrivable or otherwise damaging it for the next guy. Driving also pollutes the air, and may even force governments to fight wars in foreign countries in order to ensure that you can have fuel for your car. When driving, you also take up space. You create a danger for other people. My point is this, nothing is entirely yours; your stuff, your appearance, your problems, etc; all effect others. As such, you are stealing from other people by denying them the ability to have a say in things which you do, things which you have, things that you say, because they all effect that other individual. That is why a government must exist, and why it is fair for it to impose laws that FORCE you to do things whether you want to do them or not. A government which cannot enforce it’s own laws is not a government. It is a state of anarchy. If you privatized absolutely everything than what would come to exist would be a bunch of little governments, aka companies. Companies can force an individual to do something. Companies can take “private” property from others. Companies are governments. They can govern the lives of others. Laissez-faire capitalism will not create the kind of freedom you hope to achieve.
How, then, would non-cumpolsury employment occur in an [effectively] government-less world? What’s to stop a company from forcing you to do something, just like a government? Companies are governments. They govern those within their organization. One critical rule that a company in this country has is that citizens can decide join it or leave it. Again, how do you get past the fact that if you are on company property the company can make you do certain things, among other things pay you for being there?
Your thesis is that an individual has no control over whether he is a part of the larger organization (the government). In that same sense, an individual in my state (I’m a minor) must abide by his parents judgements, despite the fact that I had no choice in the matter of being a part of this organization. If I earn any money, my parents may, if they so choose, force me to give entirely of my substance to them. Did I get any say, whatsoever, in being able to give “my” money to them or not? Or even simply to be a part of this family? No. Neither does anyone have any choice concerning what country they’re born in.
In fact, the government acts (or is supposed to act) almost as a parent, in a sense. Government exists because human beings in anarchy are extremely immature. They do all the things they taught us not to do in primary/kindergarden: steal, harm, kill, and numerous other bad things which we shall not name.
The fact of the matter is that any organization is a governing body. You can’t expect to have order and conformity to a codified set of laws without someone to enforce it, because someone’s going to cheat. Yes, the government cheats, and other people get away with cheating to. Government doesn’t eliminate the problem, but it greatly reduces it.
What would you have society be? A collection of governing institutions (aka companies) from which one can pick and choose? What happens when one organization, or a member of one organization, comes in conflict with another? Do the companies or individuals duke it out, and in the end does “might make right”?
The problem with most alternate government systems (or “ungovernmont”, i.e. generally systems with anarchic models or foundations) is that although they create greater fairness and unity for individuals or small groups of individuals, although they create internal harmony, at the same time by dividing into these factions, there is no “higher arbitrator” to depend on, and it becomes an every-man-for-himself situation, aka anarchy. People steal from people anyways and it’s not wrong per se, and certainly not illegal, because who can enforce the law? Ultimately laissez-faire capitalism leads to greatly enhanced internal solidarity and the justice of being able to choose what one believes to be a good set of laws and practices, all things which you no doubt desire very strongly. Unfortunately what may be being overlooked is that although one has achieved internal unity and fairness, the external environment must be considered. Fragmentation of power leads to varying degrees of anarchy. People quickly get sick of anarchy, and are so desperate for safety and order that they will settle for whatever, or whoever, can create order. Sadly this almost always happens to be a highly corrupt individual or system. But it sure beats fending for oneself. Millenia of existance has taught human beings that they’re better off with the service of government. In order to reap the benefits of government, government must be sustained. So tax is necessary to eliminate chaos.
I certainly don’t envy you. Nor do I envy anyone who feels it is necessary to make personal attacks on people to make their arguments. Personal attacks and aggresive tones like yours are counterproductive to getting anywhere. Do you think you’re going to convince me by browbeating me? Do you think I’m going to convince you by insulting you? Or anyone else for that matter? Shall we both preach to the choir, my friend? Or do we wish to accomplish a greater goal than satisfying our pride? I believe what you’re doing could be a noble cause (albeit one I do not necessarily agree with right now) but by no means to I agree with your approach, in particular your tone. I listen to well-worded, well-thought out arguments that do not attempt to destroy and defame an opponent. I believe that a debate ought always to be something enjoyable. I believe in thinking outside the box. I myself have believed exactly as you do. I have gone from believing in our current government in ignorance, to believing in Christian communism, to believing in laissez-faire capitalsim as you now do, back to roughly the status quo of our governmental/economic system, although much better informed than before. I have argued your very position before. But despite this, I have never found it necessary to attack my opponent. Remember that you are fighting for a brighter future for everyone involved. Enlighten others by your arguments. Tell them something new and interesting. Demonstrate your logical approach as opposed to theirs. The beliefs of an individual are determined by -that- individual. In order to change the world, you must do so one mind at a time, by convincing them that your beliefs are sound and true. Good luck in your quest.