Why Is It Immoral for the Government to Cut Taxes for the Rich When the Rich Pay Most of the Taxes?

Gary North

In the recently published collection of excerpts from William Sloane Coffin's speeches and sermons -- Credo -- appears this gem: "When the rich take from the poor, it's called an economic plan. When the poor take from the rich, it's called class warfare. It must be wonderful for President Bush to deplore class warfare while making sure his class wins." -- Jim Wallis, "Bring It On" Sojourners Magazine (April 2004)

Mr. Wallis, I understand why you quote Mr. Coffin favorably. Mr. Coffin comes from a long line of Social Gospel preachers.

His rhetoric is creative. Unfortunately, you do not explain exactly how the two forms of taking compare.

In the Bible, any government that extracts as much as ten percent of a man's income is regarded as tyrannical. God told the prophet Samuel to warn the nation about what the king would do to them:

And he will take the tenth of your seed, and of your vineyards, and give to his officers, and to his servants. (1 Samuel 8:15)

He will take the tenth of your sheep: and ye shall be his servants. (I Samuel 8:17)

In the United States, the very poor pay no income taxes. The rich pay up to 40% of their income just at the Fedewral level. To this is added a state income tax in over 40 states.

This is clearly a violation of the tithe principle: all people must pay God's church ten percent. Is God unjust for requiring this flat tax? Is the tithe an immoral requirement because it is, as you call the flat tax, "regressive"? In short, is God a tyrant?

The Bible defines a tyrant as any civil ruler who takes as much in taxes as God takes in the tithe. Paying taxes above a tithe is the mark of God's judgment, as it was under Pharaoh (20 percent), when God used Joseph to enslave a God-defying nation (Genesis 47).

In the United States, the top half of income earners in the population pay most of the income taxes. In a 2004 article published by the National Center for Policy Analysis, we learn the following:

According to data from the IRS, the bottom 50 percent of income earners pay approximately 4 percent of income taxes.

The top 25 percent of income earners pay nearly 83 percent of the income tax burden, and the top 10 percent pay 65 percent.

The top 1 percent of income earners pay almost 35 percent of all income taxes. The top 400 richest Americans paid 1.58 of total income taxes in 2000.

Things are actually getting better for the poor in terms of income taxation by the Federal government.

In 1984, after the Reagan tax cut had been fully phased in, the bottom quintile (20 percent) of income earners paid an average federal tax rate (individual, payroll, corporate and excise) of 10.2 percent.

The top quintile of earners paid 24.5 percent and the top 1 percent paid 28.2 percent.

In 2001, after the first Bush tax cut had taken effect, those in the bottom quintile paid average federal income taxes of 5.4 percent, about half of what they did 20 years ago.

Those in the top five percent saw a slight decline in their federal tax rate (28.6 percent, down from 29.7 percent). The top 1 percent, however, saw their overall federal tax burden increase slightly, from 33 to 33.2 percent.

Despite the accusation that it was the very wealthiest who benefited the most from the 2001 tax cut, their federal tax burden stayed level at best and increased at worst. Progressivity in the tax system rose and the wealthy now pay about six times more than the poor.

If this does not persuade you, consider the following.

From 1984 to 2001, those in the bottom quintile saw their share of the total tax burden drop from 2.4 percent to 1.1 percent.

Those in the top quintile saw their share rise from 55.6 percent to 65.3 percent.

The top 10 percent increased their share from 39.3 percent to 50 percent; the top 5 percent's share rose from 28.2 to 38.5 percent; and those in the top 1 percent saw their share skyrocket from 14.7 percent to 22.7 percent.

Overall, the poor paid about half as much of the federal tax burden in 2001 as they did in 1984, while the rich paid about 50 percent more. Even those in the middle class, often said to be hit hardest by increasing taxes, saw their share decline by about a third.

So, all talk about "cutting taxes for the rich" should go into the details of how the income tax burden is borne disproportionately by the rich. Cutting taxes on the rich moves toward the principle of the tithe: a flat tax on income.

Where have you discussed these figures, so that your readers could better understand the real issues of the American tax burden? Please be specific. I am unaware of any such discussion by you. But I could be wrong. Please provide specifics.