Sometimes it is important simply to do the right thing. That is why the Board of Protestants for the Common Good called last week for a shift from a flat to a progressive income tax for Illinois.
We know that legislators are taking criticism from all directions for passing an increase in our flat income tax from 3% to 5% just nine months ago. It is not likely that we are going to hear debates on the floor of the General Assembly on behalf of any new tax structure any time soon.
We also know that a tax system that calls for more than “fair share” is hard to understand. Even if politically feasible right now, how can one justify asking some, based on income and accumulated wealth, to pay more than the same percentage applied to those at the lower end? The answer is that great disparities of income and wealth threaten our democracy.
As we debate tax policy, our country is experiencing the highest level of wealth and income inequality since the 1920’s. Consider: “as of 2007, the top 1% of households… owned 34.6% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers).” (Wealth, Income and Power, G. William Domhoff, University of California, Santa Cruz).
Concern over disparity in wealth and income is not just a matter of taste. There is a relationship between economic and political power. A profound imbalance in economic power creates divisions which make political dialogue unlikely, if not impossible. That is where we are in this country right now. In the absence of a middle class, there is no one left to call extremists on either side to compromise.
A free market will always enable the wealthy to get disproportionately more wealth, and to bend the political system to its advantage. Left alone, a level playing field will not remain level. The engine of capitalism is indispensable, but it is not self-regulating. A progressive income tax is one way to correct the imbalance.
The Old Testament recognized that readjustments are necessary to ensure that the poor are not left behind and that the social imbalances on the side of great wealth are corrected periodically. The Year of the Jubilee, when all property was to be returned to its original owners and land left fallow every fifty years, was an ancient concept about how to correct imbalance. The principle has meaning today.
All around us people are suffering. The national poverty rate is over 15%, and only a little less in Illinois. The unemployment rate in our state is over 10%. Over 6%, or about 750,000 individuals live in extreme poverty, measured as one-half (that is, $11,175 for a family of four) of what the federal government considers minimally adequate. Over 19% of Illinois children are growing up in poverty.
For a God of compassion, the criterion is not “fair share.” It is what each of us can do to alleviate suffering. Of course there are complex questions about government and economic policy. But always we must begin with a concern about human need.
Those of us in a position to pay more did not get to this point solely because of our own moral virtue. We are blessed by what we have been given as well as what we worked hard to achieve. We have an obligation to share God’s bounty with others just as we have participated in it ourselves. God does not always measure “fair share” in the conventional way.
Progressivity has been built into our national tax structure since the passage of the first personal income tax legislation under President Wilson in 1916. A progressive income tax is more the rule than the exception at the state level. Of 43 states which tax personal income, Illinois is one of only 7 with a flat rather than a progressive rate (Federation of Tax Administrators).
As a practical matter, no board member who voted for this change for Illinois expects that it will occur without a long, hard debate over several, perhaps many, years. A constitutional amendment will be required.
As our own board put this resolution to a vote last week, the room grew silent as we all realized that the measure will not pass soon.
Then one board member said, “Yes, but we must start now.” She was right.