Acton Institute Powerblog

Taxes Yesterday, Today, and Tomorrow

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Amid the hustle and bustle of preparing for tonight’s Acton Institute annual dinner, I’m trying to carve out some time to make final preparations for my participation in the 9th Annual Christian Scholars’ Symposium hosted by the Christian Legal Society. Tomorrow afternoon I’ll be debating with Gideon Strauss of the Center for Public Justice on the question, “Justice, Poverty, Politics & the State: Is There a Christian Perspective?”

One of the pressing issues related to the size and scope of government is the complex nature of today’s tax system, particularly at the federal level. Regardless of what you think of Herman Cain’s “9-9-9” tax plan, Arthur Laffer’s opening observations in a WSJ op-ed yesterday summarize well where we find ourselves:

It used to be that the sole purpose of the tax code was to raise the necessary funds to run government. But in today’s world the tax mandate has many more facets. These include income redistribution, encouraging favored industries, and discouraging unfavorable behavior.

To make matters worse there are millions and millions of taxpayers who are highly motivated to reduce their tax liabilities. And, as those taxpayers finagle and connive to find ways around the tax code, government responds by propagating new rules, new interpretations of the code, and new taxes in a never-ending chase. In the process, we create ever-more arcane tax codes that do a poor job of achieving any of their mandates.

Gideon was kind enough to ask me to contribute to CPJ’s Capital Commentary a few months back on the question of getting back to first principles with respect to the tax code. And in that piece, “Back Door Social Engineering,” I made the following case, taking my own point of departure with another quote from Laffer:

A return to a first-principles discussion of taxation in America requires a return to the fundamental purposes of taxation. Notwithstanding the current size of the federal tax code, the fundamental purpose of government taxation is not to encourage or discourage particular behaviors. The point of taxation is to raise funds to enable the government to fulfill its moral, political, and social responsibilities. It is true, as economist Arthur Laffer has made famous, that “when you tax something you get less of it, and when you reward something you get more of it.” But this reality, which takes into account how people respond to incentives, is secondary to the basic function of taxation.

It is immoral for a government to chronically run up deficits and lack the willpower to actually raise the funds it needs to do what it sets before itself. Michael Munger put it well: “Deficits are future taxes.” Quite apart from the question of what the government ought to be doing is the issue of paying for what it actually does, and our government has failed miserably on that latter point.

Jordan J. Ballor Jordan J. Ballor (Dr. theol., University of Zurich; Ph.D., Calvin Theological Seminary) is a senior research fellow and director of publishing at the Acton Institute for the Study of Religion & Liberty, where he also serves as executive editor the Journal of Markets & Morality. He is author of Get Your Hands Dirty: Essays on Christian Social Thought (and Action) (Wipf & Stock, 2013), Covenant, Causality, and Law: A Study in the Theology of Wolfgang Musculus (Vandenhoeck & Ruprecht, 2012) and Ecumenical Babel: Confusing Economic Ideology and the Church's Social Witness (Christian's Library Press, 2010), as well as editor of numerous works, including Abraham Kuyper Collected Works in Public Theology. Jordan is also associate director of the Junius Institute for Digital Reformation Research at Calvin Theological Seminary. He has authored articles in academic publications such as The Journal of Religion, Scottish Journal of Theology, Reformation & Renaissance Review, and Journal of Scholarly Publishing, and has written popular pieces for newspapers including the Detroit News, Orange County Register, and The Atlanta Journal-Constitution. In 2006, Jordan was profiled in the book, The Relevant Nation: 50 Activists, Artists And Innovators Who Are Changing The World Through Faith. Jordan's scholarly interests include Reformation studies, church-state relations, theological anthropology, social ethics, theology and economics, and research methodology. Jordan is a member of the Christian Reformed Church in North America (CRCNA), and he resides in Jenison, Michigan with his wife and three children.

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