In 1891 Pope Leo XIII wrote Rerum Novarum a landmark encyclical on Catholic social justice and the economic problems of the new industrial age. Warning against then-flowering theories of socialism he wrote that those problems cannot be solved save by assuming as a principle that private ownership must be held sacred and inviolable. He addressed the specific topic of taxes describing the moderation and fair imposing of public taxes as one of the obligations of the modern state. Excessive taxation on the other hand he described as unjust and cruel.
Leo argued that the state should encourage savings and ownership among workers and that the reasonable hope of upward economic mobility would reduce the enormous class inequality that existed in his day and forestall disruptive forced mass emigrations. He also warned however that high taxes would drain and exhaust the potential benefits of prosperous modern industrial nations.
So just how high should taxes be? How robust should our social safety nets be for the poor? And are decisions about that safety net better left to national governments or to local ones?
The pope was appropriately silent on these specific questions and his successors have followed suit. Unfortunately some of todays Catholic moralists arguing from the left lack such restraint and are issuing ex cathedra pronouncements on Republican House Budget Chairman Paul Ryans plan for long-term deficit reduction.
The Ryan budget plan Eduardo Penalver writes on the influential Catholic Commonweal blog can plausibly be accused of simply disregarding basic principles of Catholic social thought. Ryans plan will not only hurt the poor but it appears to disregard their well-being as a matter of policy. As evidence Penalver cites the Ryan plans reduction of tax rates and the defined limits it places on the governments long-term and open-ended financial exposure to health care costs.
Penalvers argument like that of President Obama depends on two unstated assumptions. The first is that the ideal tax rate both high enough to be fair and low enough to allow prosperity is higher and not lower than the current one. This is certainly debatable. I do not presume to know whether God thinks the top 1 percent of earners who made 20 percent of the nations income in 2008 and paid 40 percent of its income taxes are pulling their weight. I doubt that He smiles upon our nation more for having the second-highest corporate tax rate in the world.
The second assumption is that our impending fiscal crisis stems from a lack of revenue and not from unrealistic promises of open-ended social benefits. This is simply wrong as a look at Medicare alone demonstrates.
Federal taxes have absorbed a bit less than 20 percent of our economy since World War II. That number has remained surprisingly steady under both high and low income tax rates and under the leadership of both parties. Assuming that this doesnt change dramatically Medicare will be consuming more than a quarter of every dollar the federal government collects by 2030 and about 55 cents of each dollar before my 100th birthday. That is according to an August 2010 report from the programs actuaries. No tax increase can support that rate of growth in spending.
Ryans budget comes with this further bit of context: Our gross national debt will already exceed the annual size of our economy by the end of this year. Weve borrowed up to levels distantly approaching that of Greece and we can only borrow so much more.
Unless a governments empty promises can fulfill Catholic social teaching the stones flying at Ryan seem inappropriately cast.
In 1891 Pope Leo XIII wrote Rerum Novarum a landmark encyclical on Catholic social justice and the economic problems of the new industrial age. Warning against then-flowering theories of socialism he wrote that those problems cannot be solved save by assuming as a principle that private ownership must be held sacred and inviolable. He addressed the specific topic of taxes describing the moderation and fair imposing of public taxes as one of the obligations of the modern state. Excessive taxation on the other hand he described as unjust and cruel.
Leo argued that the state should encourage savings and ownership among workers and that the reasonable hope of upward economic mobility would reduce the enormous class inequality that existed in his day and forestall disruptive forced mass emigrations. He also warned however that high taxes would drain and exhaust the potential benefits of prosperous modern industrial nations.
So just how high should taxes be? How robust should our social safety nets be for the poor? And are decisions about that safety net better left to national governments or to local ones?
The pope was appropriately silent on these specific questions and his successors have followed suit. Unfortunately some of todays Catholic moralists arguing from the left lack such restraint and are issuing ex cathedra pronouncements on Republican House Budget Chairman Paul Ryans plan for long-term deficit reduction.
The Ryan budget plan Eduardo Penalver writes on the influential Catholic Commonweal blog can plausibly be accused of simply disregarding basic principles of Catholic social thought. Ryans plan will not only hurt the poor but it appears to disregard their well-being as a matter of policy. As evidence Penalver cites the Ryan plans reduction of tax rates and the defined limits it places on the governments long-term and open-ended financial exposure to health care costs.
Penalvers argument like that of President Obama depends on two unstated assumptions. The first is that the ideal tax rate both high enough to be fair and low enough to allow prosperity is higher and not lower than the current one. This is certainly debatable. I do not presume to know whether God thinks the top 1 percent of earners who made 20 percent of the nations income in 2008 and paid 40 percent of its income taxes are pulling their weight. I doubt that He smiles upon our nation more for having the second-highest corporate tax rate in the world.
The second assumption is that our impending fiscal crisis stems from a lack of revenue and not from unrealistic promises of open-ended social benefits. This is simply wrong as a look at Medicare alone demonstrates.
Federal taxes have absorbed a bit less than 20 percent of our economy since World War II. That number has remained surprisingly steady under both high and low income tax rates and under the leadership of both parties. Assuming that this doesnt change dramatically Medicare will be consuming more than a quarter of every dollar the federal government collects by 2030 and about 55 cents of each dollar before my 100th birthday. That is according to an August 2010 report from the programs actuaries. No tax increase can support that rate of growth in spending.
Ryans budget comes with this further bit of context: Our gross national debt will already exceed the annual size of our economy by the end of this year. Weve borrowed up to levels distantly approaching that of Greece and we can only borrow so much more.
Unless a governments empty promises can fulfill Catholic social teaching the stones flying at Ryan seem inappropriately cast.
