[And see, "Spreading the Wealth Around -- By Giving it to the Rich," ResourcesForLife.com, May 14, 2011.]
Violates Basic Catholic Moral Teachings
Funding tax cuts for the rich and corporations by cutting social programs for the poor not only violates "basic Catholic moral teachings," but the moral teachings of virtually all of the world's great religions. It's something all elected officials -- Democrats and Republicans -- need to reflect upon."For of those to whom much is given, much is required."
-- President John F. Kennedy, January 9, 1961
For unto whomsoever much is given, of him shall be much required: and to whom men have committed much, of him they will ask the more."More than 75 professors at Catholic University and other prominent Catholic colleges have written a pointed letter to [the Republican Speaker of the U.S. House of Representatives] Mr. [John] Boehner saying that the Republican-supported budget he shepherded through the House will hurt the poor, the elderly and the vulnerable, and that he therefore has failed to uphold basic Catholic moral teachings.
-- Luke, 12:48, Bible, King James Version.
"Tzedakah" is the Hebrew word for the acts that we call "charity" in English . . .. However, [where] "charity" suggests . . . a magnanimous act by the wealthy and powerful for the benefit of the poor and needy . . . "tzedakah" is derived from the Hebrew Tzadei-Dalet-Qof, meaning righteousness, justice or fairness. [It] is not viewed as a generous, magnanimous act; it is simply an act of justice and righteousness, the performance of a duty . . ..
-- "Tzedakah," Judaism 101.
"Zakāt" (Arabic: زكاة) is giving a fixed portion of accumulated wealth by those who can afford it to help the poor or needy, and also to assist the spread of Islam. It is considered a religious obligation (as opposed to voluntary charity) that the well-off owe to the needy because their wealth is seen as a "trust from God's bounty". The Qur'an and the hadith also suggest a Muslim give even more as an act of voluntary alms-giving (sadaqah).
-- "Islam," wikipedia.org.
“'Mr. Speaker, your voting record is at variance from one of the church’s most ancient moral teachings,' the letter says. 'From the apostles to the present, the magisterium of the church has insisted that those in power are morally obliged to preference the needs of the poor. Your record in support of legislation to address the desperate needs of the poor is among the worst in Congress. This fundamental concern should have great urgency for Catholic policy makers. Yet, even now, you work in opposition to it.'
"The letter writers criticize Mr. Boehner’s support for a budget that cut financing for Medicare, Medicaid and the Women, Infants and Children nutrition program, while granting tax cuts to the wealthy and corporations. They call such policies 'anti-life,' a particularly biting reference because the phrase is usually applied to politicians and others who support the right to abortion."
Laurie Goodstein, "Critical Letter By Catholics Cites Boehner On Policies," New York Times, May 12, 2011, p. A17.
Nor is this moral and religious failing limited to our politicians in Washington. It seems embedded in some state and local politicians as well (and thus, in fairness, to the extent they are our "representatives," in us as well).
There are thousands of examples from our nation's capital, but here is a current one.
During a U.S. Senate hearing May 12, "At issue was a Democratic-sponsored bill to rescind roughly $2 billion of the $4 billion in tax incentives the oil industry now enjoys annually, with the money dedicated to deficit reduction." John M. Broder, "Oil Executives, Defending Tax Breaks, Say They’d Cede Them if Everyone Did," New York Times, May 13, 2011, p. B4.
It was regrettable, but expected, that the CEOs of the five largest oil companies would show little enthusiasm for the idea. What is far more disappointing is that all virtually conceded that it was little more than what Senator Hatch characterized as a "dog and pony show" (complete with poster-size illustration of horse and dog). All recognize it's dead on arrival (DOA) in the House, and the Democrats don't have enough votes to get it passed in the Senate. (In fact, although the Catholic University professors chose to focus on a Catholic in the leadership, who was a Republican, if they were to evaluate the voting records of all 535 House and Senate members they would have ended up with a truly discouraging number of Democrats on their list as well.)
And yet, based on sales so far this year, if the companies' continue this year's prices, they are on track to pull $140 billion of profit out of our pockets -- and gas prices look like they are continuing to go up, even when world oil prices decline. ("Collectively, the five companies reported more than $35 billion in first-quarter profits, and are on a pace to set record profits for the year." Ibid.)
The companies' tax burdens have not been great. For example, "Exxon Mobil, the most profitable corporation in the history of the world, not only paid nothing in federal income taxes in 2009, but received a $156 million tax refund from the IRS, according to their own shareholder report. Repealing tax breaks for big oil and gas companies as President Obama has recommended would raise more than $35 billion in revenue over the next decade." Bernie Sanders, "End Tax Breaks for Profitable Corporations," The Huffington Post, March 27, 2011.
Nor is this giveaway limited to oil companies. As Senator Sanders continued,
"At a time when we have a $14.2 trillion national debt and a $1.6 trillion federal deficit, it is unacceptable that Exxon Mobil, General Electric, Bank of America, Chevron, Boeing, and other large, profitable corporations are not only avoiding paying any federal income taxes at all but have actually received huge refund checks from the IRS.And see Doug Mataconis, "David Stockman’s Scathing Indictment Of GOP Fiscal Policy," Outside the Beltway, August 1, 2010.
Loopholes in the tax code, offshore tax havens, tax breaks to companies that export American jobs to China, and other tax breaks have allowed giant corporations in America to receive billions in refunds from the IRS. . ..
In 2005, one out of four large corporations paid no income taxes at all even though they collected $1.1 trillion in revenue over that one-year period. . . .
Bank of America received a $1.9 billion tax refund from the IRS last year, even though it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of nearly $1 trillion. . . . Ibid.
Now here are a couple of examples from Des Moines.
If truth in advertising were required of legislation, the property tax bill that just passed the Iowa House would have to be labeled "Homeowners: Pay More for Less."Peter Fisher, "Truth in labeling on property tax bill," Iowa City Press-Citizen, May 12, 2011, p. A7.
The bill enacts complex and far-reaching changes in Iowa property taxes that over time would hamstring the ability of cities and counties to provide services, while shifting the responsibility for property taxes from business to residents. . . .
[T]he net effect is a sizable shift to residential homeowners. The commercial share of taxable property would drop by almost a third, from 29 percent to 20 percent, while the residential share would rise from 47 percent to 54 percent. . . .
Residential homeowners, many of whom also have received the short end of the deal in income-tax cuts to benefit the wealthy over the past 15 years, would again pay the tab for perks for the most well connected. . . .
Over time, the revenue limit [in the Bill] would force substantial cuts in local services because revenues would not be allowed to increase as fast as costs.
Another outrageous example is the Iowa Legislature's willingness, notwithstanding all the problems with nuclear power, to have Iowa utility ratepayers not only have to accept MidAmerican's multi-billion-dollar nuclear power plant project over Iowans' objections, but to pay for it. And not only pay for it after it is built, but before. And not only pay for it before it is built, but let the company keep the money if it decides not to build it. To make matters worse, it's not only a brazen effort to give MidAmerican's shareholders the profits while giving unrepresented Iowa ratepayers the risks and possible losses, it also looks like it violates the Iowa Constitution:
One of the fundamental principles of government is that the power of taxation and expenditure of taxes shall not be exercised for private benefit. Iowa's founders recognized this principle [in the Iowa Constitution, Art. I, Sec. 18, and Art III, Sec. 31] when they required that for any payment or promise of public funds there had to be a defined public benefit.Jim Larew, "Unconstitutionality of SF390," Iowa City Press-Citizen, May 11, 2011, p. A7.
Senate File 390 violates this fundamental principle by setting forth an unprecedented scheme for forcibly transferring private citizens' money and public taxpayer funds to MidAmerican Energy, a privately owned, for-profit utility corporation. The purpose for the legislation is subsidizing the possible construction of one or more nuclear power plants of indeterminate sizes, of undefined costs, at undisclosed locations and at some indefinite time in the future -- if at all.
The legislation further provides that if MidAmerican fails to get its plans approved or simply changes its mind, Iowa's ratepayers and taxpayers will have no recourse to get their money back. . . .
The proposed law's denial of citizens from getting their money back also is a prepaid profit scheme constituting an arbitrary deprivation of taxpayers' private property interests. State senators, facing overwhelming political pressures from Iowa's utility industry lobbyists, ought to take to heart the wisdom of our forefathers and reject MidAmerican's unconstitutional proposal to finance its private owners' risky scheme.
At the local level, this takes the form of "TIFs" -- giving developers a tax break that results in either higher property taxes for local homeowners, a cut in services, or both. The local debate has raged between advocates of TIFs and the opponents -- but meanwhile the TIFs keep sprouting up like mushrooms notwithstanding the obvious objections.
Here are just a few of the problems with TIFs, excerpted from a blog entry five years ago:
There are, of course, many other problems with TIFs besides their irrational and unfair impact on the programs that take the cuts."Understanding TIFs," October 5, 2006.
(a) They are unfair to the TIF beneficiary's competitors who do have to pay their fair share of the cost of public programs benefiting everyone. Those competitors are, thereby, subject to a competitive disadvantage.
(b) They [TIFs] are open to corruption and cronyism, paybacks for campaign contributions, bribes or other favors.
(c) TIFs are the public budgeting equivalent of violating the advice in "how to manage your money" columns and books: always go shopping with a shopping list. TIFs are, for a taxing authority, what impulse buying is for the rest of us. Budgeting is, if anything, more important for those who are managing public finance than for those of us managing our own personal finance. Approving a TIF is like our seeing something in a store, saying, "Gee, I've got to have that," and then finding out, come the end of the month, that we no longer have enough money in the bank to pay the rent. Public expenditures ought to be based on a zero-based budgeting process that looks at every past, present and potential future public program, its costs, wastes and efficiencies. There should be comparative benefit-cost analyses of potentially competing programs, and a kind of triage of those that pay back so much they should be expanded, those that should continue as they are, and those that should be cut (or eliminated). Taking up individual TIF requests as they are presented totally undercuts that process.
(d) They involve government intermeddling in what ought to be the decisions of owners and investors (such as, discussion about the number of apartments vs. condos, and floors devoted to a "hotel," in a proposed TIF-funded building). If "a camel is a horse built by committee," Iowa City's next TIF-ed project is going to be a building designed by committee -- some members of which want to optimize the developers' profits, others who want to optimize the taxing authority's tax revenues, and none of whom are solely focused on the public's welfare (e.g., in this context, "affordable housing").
(e) There is no sure fire way to know where the truth lies when a developer says, "Gee, we just couldn't think of going ahead with this project unless you'll increase the profits we will make from the venture as a result of the multi-million-dollar contribution of corporate welfare dollars from taxpayers." The odds that any given taxing authority will end up having paid out more via an individual TIF (or outright grant) than would have been necessary are very high indeed. (I.e., no public money ought to be going into for-profit ventures that the developer-owner, investors, venture capitalists, and bank loan officers combined don't think worth it without subsidy. But if public money is going to be handed over to private developers anyway, how much should it be? "Trust me, this is how much I'll need," isn't a very satisfactory analytical tool.)
(f) There are few, if any, guarantees the taxpayers will ever get a return on their dollars. If there are profits they go to the developer; if there are losses they are picked up by the taxpayers.
(g) Not only do TIFs involve the rankest ideological hypocrisy (state funding of "free private enterprise"?!), but they really distort the market forces at play, and what happens to a city's growth and development (compared with what happens when the system for making these decisions is left solely to the best judgment of entrepreneurs, investors, venture capitalists and loan officers -- restrained only by reasonable zoning restrictions).
Not only do I not object to rational and equitable economic development, I think it's essential to providing the American people with basic necessities -- including jobs -- as well as the more civilizing elements of life.
Nor do I object -- if it need be said -- to 100% public funding of such things as roads, schools, libraries, parks, and so forth (after subjecting these expenditures to the same kind of analysis suggested in (c), above). As we move along the continuum away from the more conventional public enterprises it may become more iffy; but even then -- say, if the City of Iowa City wanted to build a mixed-use tower as a 100% City-owned project -- I'm certainly willing to listen to, and evaluate, any proposal from a position of pragmatism rather than ideology.
What I object to are programs in the name of economic development that are not effective, or are unfair, or too expensive, or that have negatives outweighing any possible benefits, are difficult to administer, and return less benefit for the cost than alternatives might provide.
Put aside the costs, ethics and morality of subsidizing private enterprise; if all that doesn't bother you at least focus on the fact that such programs don't work. Our governor offered Maytag $100 million to stay. They left. In case after case, businesses given taxpayers' money have gone belly up, or never produced the promised jobs, economic growth, and increased tax revenues.
I would actually support economic growth programs that have been proven to work; programs that are fair, rational and benefit all businesses -- and citizens -- in the state of Iowa.
Those who've studied the matter say that business is attracted by a skilled workforce (which requires the unionization, liveable wage minimums, universal single-payer health care, and other economic supports to keep workers here); it also requires quality, and affordable, K-12, community college and university systems (which will require more funding); good transportation systems (buses, trains, roads and bridges, Mississippi and other rivers); communication (reasonably priced broadband, quality newspapers, television and radio); forests, parks and trails (for hiking, biking, camping, hunting, fishing and boating, which will require some restrictions on the hog lot and fertilizer runoff that pollutes rivers, streams and lakes); the support for the arts that Richard Florida talks about, and so forth.
Build that and we will have economic development -- rational, sound, free private enterprise economic development, grounded on solid fundamentals.
Build that and they will come.
See also "Brother, Can You Spare A TIF?," April 25, 2011; "TIF-ing My Toolshed," September 2, 2006; and "Supervisor Sullivan Says 'TIF, TIF, Tsk, Tsk,'" September 16, 2006; and a series of Press-Citizen opinion pieces:
Nicholas Johnson, "TIF Helps the Rich Get Richer," Iowa City Press-Citizen, April 25, 2011, p. A7 (embedded in "Brother, Can You Spare A TIF?", April 25, 2011)
Bob Elliott, "State Should Limit Use of TIF," Iowa City Press-Citizen, May 6, 2011
Christopher Manthe, "Coralville Uses TIFs Far Too Much, Too Often," Iowa City Press-Citizen, May 7, 2011
Bob Hoeft, "The Other Side of TIFs," Iowa City Press-Citizen, May 11, 2011
Bob Elliott, "It Is Possible to Use TIFs Well," Iowa City Press-Citizen, May 13, 2011
Politicians who hold public office take an oath to uphold the Constitution. But they have other obligations as well that are grounded in ethics, morality -- and the teachings of most of the world's great religions.
A variant is expressed by the phrase noblesse oblige. "'Noblesse oblige' is generally used to imply that with wealth, power and prestige come responsibilities. . . . In American English especially, the term has also been applied more broadly to those who are capable of simple acts to help another, usually one who is less fortunate." "Noblese oblige," Wikipedia.org.
President Kennedy once put it this way:
"For of those to whom much is given, much is required. And when at some future date the high court of history sits in judgment on . . . [whether] we fulfilled our responsibilities [we] will be measured by the answers to four questions: First, were we truly men of courage—with . . . the courage to resist public pressure, as well as private greed? . . . Finally, were we truly men of dedication—with an honor mortgaged to no single individual or group, and comprised of no private obligation or aim, but devoted solely to serving the public good and the national interest?"John F. Kennedy, Speech to Massachusetts State Legislature (9 January 1961); Congressional Record, January 10, 1961, vol. 107, Appendix, p. A169 (quoted in "John F. Kennedy," Wikiquote).
It is a standard by which some of our elected officials will be judged harshly. It is, however, a standard to which we have every right, indeed the obligation, to measure their performance and judge their election.