2006 Election Issues for Catholics:

Federal Budget and Tax Issues

Statement of Issue: Our federal government faces serious and difficult challenges in both how it raises sufficient funds to operate (taxes) and in how it spends those funds (budget). These are large and complicated questions. This site simply presents a broad outline of the issues.

Debt: The United States is in serious debt. Our national debt has increased from $5.8 trillion to $8.3 trillion since 2001. Interest on the national debt, $200 billion plus in 2006, will go up due to the fiscal 2006 budget deficit and increasing interest rates. This interest payment is one of the largest items in the federal budget. In 2000, the country was actually paying down the national debt and there were projections, however visionary, that the debt could be eliminated in ten years.

Annual Deficit: The fiscal 2006 budget year, ending 10/31/06, will have an operating deficit of $260 billion according to projections. "Off budget" expenditures in 2006, including spending on the war in Iraq and spending on Katrina, are in addition and will also be added to the debt.

Budget Cuts: In late 2005 and early 2006 successful efforts were made by the U.S. Congress to cut spending even as members were considering a large tax cut which was eventually passed (below). The programs to be cut included Medicaid, Food Stamps, higher education, student loans, child support administrative costs, foster care and pension insurance. (NYT, 1/19/05)

How We Got There: Pulitzer Prize winner, David Cay Johnston, in his book, Perfectly Legal, traces the upward flow of income in the U.S. Between 1970 and 2000 the wealthiest 0.01 percent, some 13,000 households, gained income significantly; the bottom ninety per cent was virtually stagnant. Johnson points out that for every dollar of income, the wealthiest gained $4.10 while the lower 90 percent gained eight cents. Johnston's 2003 book does not include data collected since, so these figures do not reflect the impact of tax cuts since 2000 which have accelerated the upward transfer of money in the United States. Perfectly Legal is subtitled: "The covert campaign to rig our tax system to benefit the super rich- -and cheat everybody else." Johnson's discussion of how the huge gap between the rich and everyone else developed identifies U.S. tax policy as the primary agent of this transfer of wealth.

Church Teaching: The U.S. Bishops' 1986 letter, "Economic Justice for All," teaches that a tax system should be continually evaluated on these principles: first, it must raise enough revenue to pay for the needs of society, especially the poor; second, it must be progressive so that those with means bear the greater share of taxes as a "means of reducing severe inequalities of income and wealth."

Enlightened Action: Study tax issues; question and educate all candidates; support efforts at campaign reform and public financing of elections. Organize in your work site, church, community, everywhere.

 

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In agreement with the U.S. Bishops, Catholics are urged to vote for candidates “based on the full range of issues, as well as on the candidate’s personal integrity, philosophy and performance,” keeping in mind that “a Catholic moral philosophy does not easily fit the ideologies of ‘right’ or ‘left’, nor the platform of any party…Our responsibility is to measure all candidates, policies, parties, and platforms by how they protect the life, dignity and rights of the human person, whether they protect the poor and the vulnerable and advance the common good."8

“Most issues are moral issues. If we take moral issues seriously, we need to vote accordingly.”

– Bishop Thomas Gumbleton
Caucus Co-chair

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1. Statements from the publication “Faithful Citizenship: a Catholic Call to Political Responsibility,” US Conference of Catholic Bishops; concepts adapted from “Peaceweavings: Choosing a Presidential Candidate, Pax Christi, USA and the National Catholic Rural Life Conference.
2.David Kamin, tax and budget analyst, Center on Budget and Policy Priorities, by telephone, August 27, 2004
3. “Tax Returns: A Comprehensive Assessment of the Bush Administration’s Record on Cutting Taxes,” Center on Budget and Policy Priorities, April 2004
4. “Studies Shed New Light on Effects of Administration’s Tax Cuts,” Center on Budget and Policy Priorities, August 25, 2004, with data from the Congressional Budget Office Mid-Session Budget Review
5. “Assessing President Bush’s Fiscal Policies,” Mark M. Zandi, Economy.com, July 2004
6. “Gap Between Rich and Poor Widening in Troubled Economy,” by Leigh Strope, Associated Press, August 17, 2004
7.Economic Justice For All Pastoral Letter on Catholic Social Teaching and the U.S. Economy, National Conference of Catholic Bishops, November 1986, 202d. The U.S. Bishops’ election statement (Faithful Citizenship, November 2003) is silent on the matter of fair taxation policies that can generate sufficient revenue for basic needs programs.
8. Address of His Holiness Pope John Paul II to the Diplomatic Corps, January 13, 2003
9. See FN at 2
10.“Studies Say Tax Cuts Now Will Bring Bigger Bill Later,” The New York Times, September 23, 2003
11. Ibid
12. “Studies Shed New Light on Effects of Administration’s Tax Cuts,” Center on Budget and Policy Priorities, August 25, 2004; Robert Reischauer, Urban Institute, as reported in Newsweek, May 24, 2004
13. “The Unbearable Costs of Empire,” by Mark Weisbrot, Business Week Online, July 29, 2004; “This Can’t Go On,” by Paul Krugman, The New York Times, November 4, 2003, p. A29
14. Congressional Budget Office data; The New York Times, September 23, 2003, p. C2
15. “Tax Returns: A Comprehensive Assessment of the Bush Administration’s Record on Cutting Taxes, ” Center on Budget and Policy Priorities, April 23, 2004
16. “Studies Shed New Light on Effects of Administration’s Tax Cuts,” Center on Budget and Policy Priorities, August 25, 2004
17. Ibid, Table 1
18. See FN at 15; U.S. Treasury Department data
19. “Studies Shed New Light on Effects of Administration’s Tax Cuts,” Center on Budget and Policy Priorities, August 25, 2004; “Tax Returns: A Comprehensive Assessment of the Bush Administration’s Record on Cutting Taxes,” Center on Budget and Policy Priorities, April 23, 2004
20. “IRS Is Tightening Rules for Low-Income Tax Credit,” The New York Times, April 25, 2003
21. NETWORK, A National Catholic Social Justice Lobby, “Budget and Taxes,” Election 2004 Charts
22. “NO END IN SIGHT TO RISING DEFICITS, EXPERTS WARN,” Committee for Economic Development, Concord Coalition, Center on Budget and Policy Priorities, September 29, 2003
23. Ibid, Table 1
24. Ibid, Table 1
25. Ibid, Table 1
17. Ibid, Table 1


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