Taxes and Catholic Social Teaching
TAXES AND CATHOLIC SOCIAL TEACHING
One constant effort of the Catholic Social Teaching, since the letter Rerum Novarum in 1891, has been to soften the hard edges of
capitalism as it affects the worker, the poor, the environment.
Since the early 1980s, there has been a strong effort in this country to reduce the size of government (as though government is a bad
thing), to reduce the taxes needed to support the activities of government, and to reduce the programs and services to be provided
particularly to the weaker members of our society.
In response, the U.S. Bishops, in their letter Economic Justice for All in 1986, advocate a strong moral role for government: “The
teachings of the Church insist that government has a moral function: protecting human rights and securing basic justice for all members
of the commonwealth” (122).
In the same document, the Bishops provide criteria by which a tax system should be continually evaluated:
“First, the tax system should raise adequate revenues to pay for the public needs of society, especially to meet the needs of the poor.
Secondly, the tax system should be structured according to the principle of progressivity, so that those with relatively greater financial
resources pay a higher rate of taxation. The inclusion of such a principle in tax policies is an important means of reducing the severe
inequalities of income and wealth in the nation. Action should be taken to reduce or offset that fact that most sales taxes and payroll taxes
place a disproportionate burden on those with lower income. Thirdly, families below the official poverty line should not be required to pay
income taxes” (260).
This teaching of the American Bishops is consonant with the teachings of Vatican Council II and Pope John XXIII:
“The obligations of justice and love are fulfilled only if each person, contributing to the common good, according to his own abilities and the
needs of others, also promotes and assists the public and private institutions dedicated to bettering the conditions of human life.” (The
Church and the Modern World #30)
“As regards taxation, assessment according to ability is fundamental to a just and equitable system.” (Mater and Magistra, Pope John XXIII,
1961)
These teachings of the Church raise some questions about the solution to Michigan’s current and ongoing tax crisis:
1. Reducing the taxes without regard to the personal and social needs of our citizens seems to be the wrong starting point. Rather,
we should start with the verified needs of society and endeavor to meet these needs with taxation.
2. Sales taxes are by definition regressive: impacting the poor and moderate income people more heavily than the more affluent.
3. Reducing personal income taxes and business income taxes does not preserve the progressivity that is recommended by the
bishops.
Catholic Social Teachings raises profound questions about the tax structure of the State of Michigan. As we consider how best to confront
the current crisis, these principles, which we believe are ethical by human standards as well as Catholic standards, should be seriously
advocated in the public forum.
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