Paul L. Caron

Sunday, November 7, 2021

Afield: Framing Tax Enforcement Against The Poor Through Catholic Social Teaching

W. Edward Afield (Georgia State), Framing Tax Enforcement Against the Poor Through Catholic Social Teaching:

What makes for just tax policy? As Professor Hamill observes in her Canopy Forum piece on the estate tax [Religiously Based Ethical Arguments Favoring Estate Taxes], tax policy “is ultimately a justice-based ethical issue” that naturally connects to the values underlying a citizen’s perception of justice. Law and religion scholars have been paying greater attention to tax policy, with primary focus on questions of front-end tax system design. This focus has been understandable, as these questions of design appear to connect most readily to religious values about how burdens and resources should be distributed in a society, and what is the obligation of the citizen to comply with laws that direct a portion of his or her property to the government. Thus, evaluation of tax policy through a religious lens has most frequently focused on the important questions of what an appropriate rate of taxation should be; whether a tax system should be progressive; the nature of the moral obligation of citizens to comply with secular tax laws; and how religious framing of this obligation could potentially improve tax compliance.

This initial work is incomplete, however. In addition to applying a religious lens to the front-end design questions, law and religion scholars need to spend more time wrestling with the back-end administration and enforcement questions. Administration and enforcement of the tax laws can have considerable impact over whether a system of taxation is just — as the public is perhaps beginning to learn through the recent debate regarding increasing the IRS’s enforcement budget. Focusing value-based tax policy arguments primarily on the legislative component at the expense of the administrative can, even if successful, result in the Pyrrhic victory of legislative justice gains that are subsequently undermined by administrative failures.

In recent years, administration and enforcement issues have begun to draw the attention of tax scholars more generally and have certainly been a point of emphasis for the National Taxpayer Advocate. It is time for law and religion scholars to join them. The IRS increasingly plays more of a role in the lives of our most economically vulnerable, both in regards to how taxes are collected and how public benefits are administered. The presence of the IRS in the lives of the economically vulnerable is set only to increase, as evidenced by the recent use of the IRS to administer COVID-19 economic stimulus payments and to manage a monthly payment of the child tax credit. Religious evaluation of tax policy most often starts from the value of the burden that we place on the poor, and that burden is often nowhere more acutely experienced than in how the poor interact with the IRS.

In regards to the religious social teaching tradition with which I am most familiar, Catholic social teaching (CST), three pillars are relevant to how the IRS administers the tax system for the most economically vulnerable. The Pontifical Council for Justice and Peace’s Compendium of the Social Doctrine of the Church, in arguing that “[p]ublic spending is directed to the common good when certain fundamental principles are observed,” describes “the payment of taxes as part of the duty of solidarity; a reasonable and fair application of taxes; precision and integrity in administering and distributing public resources.” Mentioned specifically in this statement are the principles of solidarity and the common good. In addition to these principles, “a reasonable and fair application of taxes,” combined with “precision and integrity in administering and distributing public resources” with a focus on the “common good,” should be read to involve two other pillars of Catholic social teaching: subsidiarity and the preferential option for the poor. Both of these principles would need to be advanced in any tax system that claims to be distributionally reasonable and precise in its administration. Although other principles of Catholic social teaching could likely be implicated to a lesser extent in tax enforcement, the starting point for a Catholic social teaching critique of tax enforcement should be these foundational principles: subsidiarity, solidarity, and the preferential option for the poor. ...

Tax enforcement cannot fully advance the preferential option for the poor in solidarity without adopting a more subsidiarity focused enforcement regime that recognizes that, even within the context of federal enforcement, there is a need for more localized solutions, particularly in regards to federal government’s efforts to help the economically vulnerable.

In the coming months, there is likely to be more talk about tax enforcement as the government debates providing more resources to the IRS. While providing an appropriate budget to the IRS is important, it would be a shame if the debate about tax enforcement stopped at the question of whether the IRS has sufficient resources. How the government administers the tax laws is just as reflective of society’s values as the tax laws themselves.

For those citizens whose value system is rooted in Catholic social teaching, they can look at the increasing growth of tax laws that provide benefits to the poor, and they can see their values reflected in their tax code. They will not, however, see their values similarly reflected in the enforcement of these laws. Because CST does not have a monopoly either among religious traditions or among secular value systems on emphasizing care for the poor, other citizens whose values prioritize the poor are likely to experience similar dissonance in comparing the tax laws to their administration.

The present moment offers an opportunity for these citizens to bring these values into the enforcement debate in order to remind the government that more enforcement resources, while necessary, are not sufficient unless they support enforcement values that match the underlying values of the laws themselves.

Legal Education, Scholarship, Tax, Tax Scholarship | Permalink