When I say to groups that our primary issue to mend the income and wealth gap in our nation is tax policy, I often see eyes glaze over or people get ready to argue. But for us here at NETWORK, our faith leads us to engage this as a top priority and here is why!
What we have to remember is that from 1949 to 1979 every level of our society shared our post-war prosperity. The top marginal tax rate hovered around 80 percent. With that high of a tax rate at the top, executives were not as focused on increasing their salaries. In 1965, the average salary for a CEO was 20 times the amount for the average salaries of their workers.
This all changed in the 1980’s with the advent of Ronald Reagan and his “trickle-down economics.” Reagan and other supporters of this theory slashed tax rates for the top income bracket to less than 30 percent, and top executive salaries began to skyrocket while workers’ wages stagnated. In 2015, the average CEO salary was 303 times their workers’ average salaries. This is fueling our income and wealth disparity and hurting our people.
As Pope Francis says in Joy of the Gospel, paragraph 54:
…Some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system. Meanwhile, the excluded are still waiting. To sustain a lifestyle which excludes others, or to sustain enthusiasm for that selfish ideal, a globalization of indifference has developed.
This is the problem we have in our nation. The majority of people seem to be indifferent as the wealthiest people become more and more out of touch with those who are in the bottom 60 percent economically in our nation. We are becoming too far away from each other to be aware of our neighbors’ real needs.
Trickle-down economics has driven a wedge between those at the top and the rest of us, and our whole nation suffers as a result. But Speaker Paul Ryan and his colleagues continue to push trickle-down policies that give even more money to those who already have too much. The American Health Care Act (AHCA) that passed in the House of Representatives gave $680 billion in tax cuts to the wealthy over the next 10 years while taking away healthcare from 24 million people. This is wrong in any nation, but especially in a nation that can afford to provide care for its people.
NETWORK’s position on tax policy is at the heart of our solution to this challenging reality. We believe that everyone should pay a fair share. We also know that tax policy can promote or discourage certain behaviors. Our reflection and prayer lead us to say, let’s create tax policies that preference the common good and work to end the racial wealth gap.
We dream of incentives for corporations and business owners whose executives are paid no more than 40 or 50 times what their lowest-paid employee makes. Or – what if businesses that pay a living wage received a tax credit because their workers are not relying on the social safety net? Could the home mortgage interest deduction be designed to offset the serious and systemic housing discrimination people of color have experienced over generations? These are just a few ideas, but the bottom line is that we need to end failed trickle-down policies and open our minds to a new way forward.
So, we urge you to join us in ending the indifference to unjust tax policies that is rife in our country. New tax policy will be created when our hearts are broken open to the needs of those around us. We all suffer in a system of cold, harsh individualism. Such a system is not aligned with our faith teachings or with the best of our nation. Let’s establish a tax policy that pays for the services our nation really needs and actively reduces the income and wealth gap. It is possible to achieve this goal through prayer and action. The time is now!