TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Tuesday, July 8, 2014

Presbyterian Church: Tax Justice -- A Christian Response to a New Gilded Age

The General Assembly of the Presbyterian Church (USA) has approved (425-170) Tax Justice: A Christian Response to a New Gilded Age, which advocates overhauling the tax code to make it:

  • GAmore progressive, taxing those with greater wealth at higher proportions of their income, wealth, and inheritance;
  • more transparent, which includes both simplicity and accountability for all tax preferences and tax expenditures;
  • more solidarity-focused, which means reducing the use of tax expenditures, shelters and havens, and supporting more adequate international standards to reduce tax competition within and among nations;
  • more sustainable for current and future generations, which means avoiding unproductive financial and ecological indebtedness; and
  • more adequate, effectively addressing broader objectives of economic and social health than efficiency alone, such as meaningful employment, improved family life, and restored public trust. The tax system must be characterized by both efficiency in tax collection and revenue sufficient for the common good.

For more, see The Layman Online, PCUSA’s Social Witness Policy Now Advocates for Comprehensive Progressive Tax Reform.

(Hat Tip: Pat Oglesby.)

Tax | Permalink


Thanks very much for posting.

This is a remarkably detailed document. Excerpts from the section on" International Corporate Tax Avoidance" include:
With respect to . . . “transfer pricing” . . ., which today facilitate the movement of income by businesses to tax havens, the church should support work that has been begun to cause nations to change laws so that tax avoidance through income-shifting to tax havens is no longer permitted.
. . .
Greater clarity and transparency in lawmaking are needed so that today’s opportunities for arguably legal tax avoidance, for example, by the use of tax havens, are eliminated. International tax laws, including transfer pricing laws and highly technical provisions such as “check the box,” appear innocuous at first impression, especially by those without technical backgrounds in taxation, but they allow such room for tax avoidance that multinational firms often can “pick” the jurisdiction in which to pay taxes (and not to pay taxes) without regard to the country of residence of owners, employees, or customers or location of raw materials or manufacturing. . . . The method of “formulary apportionment,” while requiring careful technical work on the necessary implementing laws, may advance solutions in this area.

Posted by: Pat Oglesby | Jul 8, 2014 6:23:11 AM

Years ago, I read a history of the Rockefeller family and one detail stands out. At a time when tax rates on the wealthy were supposed to be extraordinarily high, John Rockefeller III's brothers consider him odd. He'd instructed his accountants to no doing anything that'd drop the taxes he actually paid below 10%. His brothers were paying far less and thus far less, as a percentage of income, that most Americans.

That illustrates a point about taxing the rich that these Presbyterians apparently fail to realize. When liberal politicians talk of raising taxes on the rich, they have two goals in mind.

1. Setting themselves up for large donations from the very rich to fill those taxes with loopholes. Keep in mind that, when it comes to buying off politicians, only the rich are properly positioned to do so. When a special loophole will save someone millions, they can afford to pay some senator a few thousand to slip it into our complex tax code.

2. Establishing the framework for taxing those with moderate incomes higher. "Don't complain about your 17% rate," they will say. "Look, the superrich are paying 80%."

Except that the superrich aren't paying anything like that 80% and given the politicians we tend to elect they never will.

Posted by: Michael W. Perry | Jul 8, 2014 7:10:10 AM

It is good to know that people of faith are also thinking people. We have recently heard similar exhortations--though not as detailed--from Pope Francis. Now I would like to hear from the Methodists, Episcopalians, UCCers, etc.

Posted by: Publius Novus | Jul 8, 2014 8:10:01 AM

Resolutions like this blithely ignore a basic precept of people – they would rather pay less than more for anything. The use of clichéd adages – “[g]reater clarity and transparency in lawmaking are needed” – illustrate the incredible lack of understanding of how the world, starting with the U.S. Congress, works. The overriding issue that all these advocates of a worldwide, uniform income tax system with automatic exchange of taxpayer information among tax authorities do not address is that such a system would have to include regimes like Russia, China, the nascent ISIS, and the resource-poor island nations of the Caribbean. The few technical tax people who authored this resolution should be embarrassed at the way it describes how transfer pricing functions, the use of the check-the-box regulations (this was Treasury’s idea because they spent so many man-hours issuing rulings on what was a foreign corporation), and the premises for the existence of tax havens. The resolution does not cite but clearly reflects sources like the 2013 Task Force Report of the Human Rights Institute of the Int’l Bar Assoc., “Tax Abuses, Poverty, and Human Rights.” If you read the literature of the members of the panel who wrote the IBAHRI report, you will see that they had their mind made up before they even began.
Meanwhile, this same Presbyterian Assembly also approved a resolution calling for divestment in companies engaged in “non-peaceful pursuits” in Israel, aligning itself with the global Boycott, Divest and Sanctions movement against Israel.

Posted by: TexEcon | Jul 8, 2014 9:10:31 AM

The church proposal implies consent for more political targeting of conservative non-profits and calls for higher taxes. It is completely void of any sense of the negative effects that any tax increases, no matter how targeted, have on families, businesses, and the economy – despite being “for the common good.”

Based upon these naïve and high-sounding ideas, taxes and economics must be subjects that receive little emphasis at seminaries.

Posted by: Woody | Jul 8, 2014 9:39:24 PM