A taxing question: what serves the common good?

By Barb Arland-Fye
Editorial

Luke advises us in his Gospel, “Give and gifts will be given to you; a good measure, packed together, shaken down, and overflowing, will be poured into your lap. For the measure with which you measure will in return be measured out to you” (Luke 6:38). The “Catechism of the Catholic Church” teaches, “Economic life is not meant solely to multiply goods produced and increase profit or power; it is ordered first of all to the service of persons, of the whole man, and of the entire human community” (#2426).

Our faith commits us to serve the common good, with a preferential option for the poor. That obligation should lead to express opposition to recently introduced income tax bills in the Iowa Legislature. Senate Study Bill (SSB) 3142 and House Study Bill (HSB) 721 would require two-thirds majorities to increase individual or corporate income tax rates and require that any individual income tax rate be set at a single rate for all individuals, regardless of income.

A “mere 17 senators could block the will of 133 other elected legislators and a governor who might deem it necessary to raise revenues equitably and responsibly to meet the state’s needs,” said Mike Owen, deputy director of Common Good Iowa. Legislators “are telling us their opinion on taxes is so important that they should overrule that of anyone elected after them, regardless of the consequences their choices today leave those future legislators — and their constituents.”

Among other things, Common Good Iowa says the proposed bill would lock in recent income tax cuts that benefit the richest Iowans, decimate state services and cement inequities into Iowa taxes by allowing only a flat-rate income tax. “The average millionaire will see a cut of $62,000 a year. In the middle, Iowans earning $40,000 to $60,000 will see an average cut of $300 … Most with incomes under $40,000 will see no cut at all” (https://tinyurl.com/bdefxauc).

Common Good Iowa points out the proposed legislation “does not apply to income-tax cuts, or to increases in the sales tax or other fees and fines that tend to be borne more heavily, as a share of income, by lower- and middle-income Iowans.” Furthermore, sales and property taxes “tax low- and moderate-income Iowans much more heavily as a percentage of income than they do high-income Iowans.” Think about the vulnerable Iowans in our midst. The working poor. The frontline workers in fields ranging from food service, retail and hospitality to education and daycare.

 The principles of Catholic Social Teaching led the Iowa Catholic Conference (ICC) to register its opposition to the bills, said Tom Chapman, executive director of the ICC, the public policy voice of Iowa’s bishops. “These are principles in the Catholic Church that address issues of human life and dignity, and care for the poor and vulnerable.”

The ICC statement on taxation spells out the principles clearly. “… Taxation in any form should be based on one’s ability to pay. If Iowa tax policy is to remain faithful to Catholic teachings, it should first assure that the system collects taxes according to one’s ability to pay. Catholic social teaching supports a more progressive form of taxation. Our contribution to the common good should reflect our blessings” (https://iowacatholicconference.org/taxation-2003/).

Referencing the statement, Chapman notes, “The principle of ‘contributive’ justice says that all members of a society have a responsibility to contribute to the common good. From those to whom much has been given, much should be expected. Paying taxes is one way that people give something back to society.” 

Likewise, “The principle of ‘distributive’ justice suggests that we should have a special concern for the poor and vulnerable. We have many programs in the state that help people and that is good. We also don’t want low-income people to pay a much greater percentage of their income for necessities. We support keeping an income tax.”

Two additional concerns: the proposed legislation would require a two-thirds vote for any increase but not a decrease. Section 2 would make it unconstitutional to have a graduated tax rate for individuals. Chapman said the ICC opposes this section “because it would not permit a legislature to adopt a lower tax rate for lower-income people.”

Keep in mind that 57.3 percent of Iowa’s general fund revenue comes from personal or corporate income taxes. Sales taxes represent 32.7 percent (State Sen. Cindy Winckler, e-newsletter March 8). Who will carry the heaviest responsibility for funding schools, public safety and other vital services that Iowans, particularly those struggling to afford housing, groceries and medications, depend on?

This is our call to action — to change hearts as well as to express opposition to our legislators regarding SSB 3142 and HSB 721 (legis.iowa.gov/legislators). Visit the ICC website to learn more about advocacy efforts (iowacatholicconference.org).

“Catholic social teaching is built on a commitment to the poor,” the U.S. Conference of Catholic Bishops (USCCB) states. “This commitment arises from our experience of Christ in the Eucharist.”

Barb Arland-Fye, Editor
arland-fye@davenportdiocese.org