A candid word about taxes

We are just a few months out from Tax Day, and the sting has perhaps subsided for most American taxpayers. For those who pay quarterly, whether because they are self-employed or collect income that requires such pre-payments, June represents another checkpoint in the annual tax tribute.

The big picture at this quarterly benchmark is bleak. The publicly held debt incurred by the federal government has surpassed a notable threshold, breaking past 100 percent of GDP by the end of April. The last time that figure was this high was 1946 as the United States was emerging from the sacrifices of the Second World War and engaging in projects to rebuild Europe and the global economy. Now, 80 years later, the American economy and population is much larger, but so is the accumulated weight of debt amassed over decades of federal overreach and irresponsibility.

A good rule of thumb when thinking about deficits accumulating into long-term debt is that they inevitably come to require future taxes. And so no matter how much or how little each one of us paid this year in taxes to the federal government, it was not enough. It was not enough in mathematical terms to cover government spending, and it was not enough in moral terms to leave a better inheritance for future generations.

There are many different ways to look at the numbers and many different measures that can be considered. None of them provide a particularly pretty picture. According to the US Debt Clock, the debt per citizen cashes in at just under $114,000. The number per taxpayer is significantly higher, nearly $356,000. That’s more than four times the median household annual income in America.

One way of thinking about this is that each one of us just isn’t paying enough in taxes. Roughly 40 percent of American households do not pay income taxes, although most of these do pay taxes in other ways, including through payroll deductions. Those in the top 10 percent of income earners pay more than 70 percent of income taxes. So even the amounts that are collected, which fall well short of federal outlays, are distributed very unevenly.

We can think of the services the government provides as necessary for peace, justice, and the quality of life we enjoy in the modern world. By racking up such absurd levels of debt, all Americans have simply been irresponsible by not paying more. That’s simply “the price we pay for civilized society,” as Oliver Wendell Holmes put it memorably, and it is a price we should be not only willing but grateful to pay to live in the most prosperous and free nation in human history.

The problem cannot simply be solved by paying more in taxes, though. The federal debt is not simply a math problem. This level of debt is, in fact, indicative of a deeper moral and spiritual problem. We simply expect too much from our government. Or we allow our government to do too much. Or we do not demand enough responsibility from our elected officials. Or all of the above.

The debt is a measure of the true costs of our society, and these are not costs that we will bear alone. They are burdens we are placing on future generations, our children, and their children, and generations that those of us alive today will not live to be accountable to. This matter of intergenerational justice becomes even more significant when we consider the downward demographic trends and that in all likelihood there will be fewer people to take up these burdens.

The problem is not simply a math problem, but the math is part of the problem as well as the solution. We need to spend less and address the federal debt side of the equation—and doing this responsibly will require entitlement reform. But we also need to continue to grow the economy and address that side of the formula as well. Neither of these will be sufficient to address the deeper spiritual malaise that afflicts a materialistic and consumeristic society, one which looks either to government or markets to fulfill our deepest desires.

God has created us as economic beings, and a thriving economy is essential to meeting earthly needs. Government is rightly understood as God’s servant to pursue and promote public justice, and that includes matters of economic policy. But as it stands today, Americans expect too much from government and too little from ourselves. We need to be willing to do more, in terms of our charitable giving and work, our contributions of goods and services in the market, and yes, even in the payment of our taxes.

Scripture tells us to leave no debt outstanding and to render to everyone what they are owed, including taxes. We owe it to ourselves and to future generations to address the mounting public debt, a responsibility that we cannot shirk without dire consequences.