Are Taxes Socialist?
Analysis from the Perspective of Catholic Social Thought
The American Catholic bishops in their guide to Catholic voters, Forming Consciences for Faith Citizenship, insist that public policies properly should serve not private interests, but rather the common good. Consistent with serving the common good, the bishops also insist that while public policies must concern themselves with all the needs of the nation, we are especially required when pursuing any public policy to concern ourselves with its impact on those "least of our brethren" among us. This applies to tax policy, as well as to all other policies.
- A tax policy that taxes wealthier citizens at a higher rate than poorer citizens conforms with Catholicism's preferential option for the poor. Here in the United States, the earliest of such so-called "progressive" income tax plans were enacted by the Republican Party during the Civil War. By the turn of the last century, Republican presidents, Teddy Roosevelt and William Howard Taft pushed hard to make progressive income taxes permanent. And, since the passage of the 16th Amendment in 1913, both political parties have consistently supported progressive tax policies.
- Both Senator Obama's and Senator McCain's tax plans, accordingly, are "progressive," in that both plans tax the wealthy more than the poor. Indeed, the differences are but a few percentage points. Senator McCain taxes the wealthiest Americans at 35% of income. Senator Obama's top rate is 36% for those earning more than $250,000 and 39.6% for those earning more than $1.6 million per year. To put these plans in perspective, the income tax rate for the wealthiest of Americans was 70% in the late 1970s, 50% through most of the 1980s, and 39.6% for most of the 1990s.
- What do progressive taxes have to do with socialism? Nothing. Socialism, by definition, is an economic system in which major national industries and instruments of economic exchange are controlled by the state. Conceivably, any tax plan could be found in socialist systems.
- For Catholics, progressive tax policies are in accord with our obligation to serve the common good with fairness to those "least of our brethren" among us.