Bishops (again) object to G.O.P. tax plan’s effects on the poor

Speaker of the House Paul Ryan, R-Wis., points to boxes of petitions supporting the Republican tax reform bill that is set for a vote later this week as he arrives for a news conference on Capitol Hill in Washington, Tuesday, Nov. 14, 2017. (AP Photo/J. Scott Applewhite) Speaker of the House Paul Ryan, R-Wis., points to boxes of petitions supporting the Republican tax reform bill that is set for a vote later this week as he arrives for a news conference on Capitol Hill in Washington, Tuesday, Nov. 14, 2017. (AP Photo/J. Scott Applewhite)

As congressional Republicans push forward a massive tax cut package that could see tax hikes for the poor and middle class alongside tax cuts for the wealthiest Americans, Catholic bishops have again condemned measures that they say could harm the poor.

Saying that bishops do not propose specific tax policy, Bishop Frank Dewane of Venice, Fla., said Tuesday that they “are advocating for the poor.” The chairman of the bishops’ committee on domestic justice was speaking during a press conference in Baltimore, part of the bishops’ annual fall meeting.

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Bishop Frank Dewane said Tuesday that the bishops “are advocating for the poor.”

He said he worried that the tax bill would put in jeopardy “some of the safety net programs that help the poor,” saying that the tax cuts, which are expected to drive up the federal deficit, will eventually lead to reductions in social services.

During an address to the full body of bishops, Bishop DeWane highlighted three areas his committee was focused on: health care, the federal budget and tax cuts. He urged his brother bishops to contact lawmakers personally to advocate for issues related to all three, echoing statements made on Monday during a session on immigration issues from Bishop Michael Olson of the Diocese of Fort-Worth. Bishop Olson said individual bishops should be more proactive with their own lawmakers, telling the group, “We have to contact our own representatives by phone, by email.”

Bishop Dewane said a “particularly painful” aspect of the G.O.P.-backed plan in the House were tax increases that “will hit the poor very hard” in the coming years.

“No tax reform proposal is acceptable that increases taxes for those living in poverty to help pay for benefits for wealthy citizens.”

“No tax reform proposal is acceptable that increases taxes for those living in poverty to help pay for benefits for wealthy citizens,” he said, quoting a letter the U.S.C.C.B. wrote to lawmakers earlier this fall.

While praising a provision that doubles the standard deduction, which would result in a smaller tax bill for Americans who do not itemize their deductions, Bishop Dewane said that bishops worry that the measure will harm charitable giving in the United States.

Experts say that the total amount of individual giving to charities could drop by close to $5 billion with changes to the tax code, which could devastate organizations serving the poor—including many affiliated with the Catholic Church.

“The House bill will have a dramatic impact on charitable giving,” Bishop Dewane said, adding that it would amount to a “disincentive to giving,” which he said would “hurt groups that will be asked to do more for the poor in the days ahead.”

Bishop Dewane: Tax bill would “hurt groups that will be asked to do more for the poor in the days ahead.”

Responding to Bishop Dewane’s presentation, Bishop Michael Bransfield, who heads the Diocese of Wheeling-Charleston, W.V., called charitable giving “a very important part of our culture,” adding that “there’s a very educated Catholic class that uses it.” He said removing incentives to spur donations “will really hurt us.”

Part of the House plan includes an eventual repeal of the estate tax. On Wednesday, the left-leaning Center for American Progress released a study suggesting that charitable giving would also suffer because of this provision. It estimates that by 2024 religious organizations might lose out on nearly $2.5 billion from donations left through wills.

House Republicans are expected to vote on their bill as early as Thursday.

Bishop Michael Bransfield said removing incentives to spur donations “will really hurt us.”

Meanwhile, the U.S. Senate is considering a separate bill that could repeal a key part of the Affordable Care Act that requires Americans to buy health insurance.

Erasing the A.C.A.’s individual mandate provided Republicans with more money, which they used to make some tax breaks modestly more generous. But it raised questions about whether it might prompt some moderate GOP senators to back away from the measure.

Both the U.S.C.C.B. and the Catholic Health Association, which represents hundreds of Catholic hospitals in the United States, have opposed efforts to roll back Obamacare without ensuring that poor and middle-income Americans would be able to keep access to insurance.

The nonpartisan Congressional Budget Office has projected that dismantling the requirement would mean 4 million additional uninsured people by 2019 and 13 million more by 2027. Worries about leaving more people without coverage were among the reasons GOP attempts to outright repeal much of President Barack Obama’s law crashed in the Senate this summer.

On Wednesday, the Catholic Health Association tweeted a message urging its followers to contact senators to “ask them to oppose any legislation that includes an individual mandate repeal.”

Material from the Associated Press was used in this report.

Comments are automatically closed two weeks after an article's initial publication. See our comments policy for more.
Lisa Weber
1 month ago

I am glad the USCCB is speaking out against this horrible tax plan, but I certainly wish they had spoken out more clearly during the campaign in 2016.

Vincent Gaglione
1 month ago

The irony here is that Speaker Ryan, just recently lauded and praised by the Cardinal Archbishop of New York at the Al Smith Dinner, intends to push forward the House tax legislation. That legislation includes not only all the cuts named in the article but also includes necessitating cuts to Medicare and other entitlements in the years to come, as required by 2010 legislation vis-à-vis deficit spending. Ryan has even spoken affirming that fact!

The article touches on something that I have been thinking a great deal about. The proposed tax legislation in both the House and Senate will increase my tax liabilities because I live in a high tax state where I can currently deduct state and local taxes, sales taxes, and property taxes on my federal income tax. The legislation will have a big impact on my deductible charitable giving.

I already spend significant monies on charitable giving that I CANNOT deduct. Those gifts cannot be forsaken because shelter and food is involved. I find it embarrassing that some bishops seem more concerned about the effects the tax legislation will have on their local church support as opposed to the hungry, homeless, and elderly. My deductible gifts to parish and other Catholic appeals can be forsaken because most of them, except for CRS and gifts to orders of nuns for their elderly, really don’t touch on life-affecting situations. One less steak for dinner at the rectory or Bishop’s residence is not an issue for me.

The majority of Catholic bishops have gotten more than they bargained for in their tacit support of Republican politicians. This is one Democrat who has no compunction in both saying so and withholding monies where real “life and death” issues do not prevail. As a priest long ago preached from the pulpit of the student Catholic center which I attended nearly 50 years ago, and which I have never forgotten, if you don’t agree with the bishop, withhold your money. That will get his attention.

Randal Agostini
4 weeks 1 day ago

No matter how many times it is explained, there are those that will never see the trees for the forest. What is one of the most fundamental attributes of belief - Faith. For years the American economy has suffered from a liberal focus of always addressing the consequence rather than the cause, which has resulted in a moribund economy with ever increasing poor and ever increasing very rich. The economy has to be changed to incentivize the rich to invest rather than hoard. The result will be an expended economy that creates more wealth - for all. The increased wealth will pay down debt, raise the working wage, employ more, reverse the ranks of the poor and narrow the gap between the rich and the poor - Have Faith.
It was a poor choice the Catholic Church made to back social support for Insurance as though healthcare is a risk. Healthcare is neither a risk nor a right - it is a command from God. That is why the Catholic Church invented it. Hitching a wagon to Insurance companies simply raised the price by one third and more and made Insurance, patients and healthcare providers contestants.
We need renewed Faith from our Bishops so that they may see the Will of God through Wisdom and humility.

Chuck Kotlarz
4 weeks ago

Randall, trickle-down has failed for nearly forty years.

Between 1947 and 2016, business investment as a share of GDP rose 1.5% with a democrat in the White House and fell 1% with a Republican in the White House. Business investment as a share of GDP rose 3% during Obama’s presidency, roughly a $500 billion increase in a $15 trillion economy.

Stuart Meisenzahl
4 weeks ago

Chuck
Yet again more statistics that have no causal relationship. Correlation is not equivalent to causation. As I have pointed out to you before the three states with the highest homeless rate are Union shop states; while the three states with the lowest homeless rate are right to work states. Your use of statistics would require one to believe there is a cause and effect relationship between reducing homelessness and adopting right to work legislation. In point of fact these statistics just as the statistics you have cited prove absolutely nothing when it comes to causation.

Chuck Kotlarz
4 weeks ago

Feel free to explain the causal relationship between tax cuts and trickle down. Events since 1980 left little trickle down legacy.

Your observations about the homeless perhaps have merit. Other readers more knowledgeable about the homeless may wish to comment.

Michael Barberi
4 weeks 1 day ago

Is is a sad day when most Americans cannot go to one site or read an unbiased analysis of the GOP tax bill. Some so-called unbiased institutions often make questionable assumptions, and predict things like safety-net programs will be doomed and charitable giving significantly curtained. For example, those that make under $100,000 and take the doubling of the standard deduction and forgo itemizing are predicted to stop or reduce their charitable giving. Sorry, I cannot get my mind around the thinking that charitable giving will stop or significantly decreases EVEN when the family's overall tax liability will go down under the GOP tax bill by using the new standard deduction. The psychology of charitable giving seems to be directly related to a tax deduction regardless if the person's tax liability goes down.

Another analysis says that there will be more people and families who will not pay any taxes compared to the current tax law. If we believe that then GOP tax bill does help the poor here. Granted, one must analyze all the elements of a new tax bill and demonstrate by example how people or families that earn $50,000, $75,000, $100,000 and $250,000 a year and more will fare. I get it. However, to date I have not seen an unbiased analysis that most people deem credible.

What I do see is loud cries of condemnation, GOP bashing to the nth degree and wishful thinking from the bishops who seem to think that a perfect tax plan is feasible.

I do believe that the rich should pay more, incentives added for businesses to invest and create jobs, and the tax burden of the poor further reduced. Unfortunately, in any tax overhaul plan some people will be negatively impacted so let's hope this will be minimized to the extent it can be.

Ellen B
4 weeks 1 day ago

If you want to see how well those tax cuts for businesses work, see Kansas. If you want to see how much those cuts to Corporate taxes will drive investment, see the WSJ.

Michael Barberi
4 weeks ago

Ellen,

Kanas exempted pass-through income while the GOP plan cuts the tax rate to 25%. Big difference. From an article you suggested, note below:

"The failure of the state's (Kansas's) tax-cutting experiment hasn't dampened enthusiasm for Trump's tax-reform proposal among Kansas' all-Republican congressional delegation. All five of the state's U.S. House members and both of its U.S. Senators have expressed support the president's plan."

My Point: Those who bash Trump and the GOP tax plan only like to talk about what they want, and not all the details that should be part of any unbiased and accurate assessment of a tax plan. Thus, where is such an unbiased analysis?

Ellen B
4 weeks 1 day ago

If you want to see how well those tax cuts for businesses work, see Kansas. If you want to see how much those cuts to Corporate taxes will drive investment, see the WSJ.

Ellen B
4 weeks 1 day ago

Once the deficit is driven up, the GOP will then begin to attack "government spending" meaning Social Security, Medicare, Medicaid... the elimination of middle class tax cuts (set to expire in the 2020's) will go through. It's an attack on everyone who isn't in the 1%, the poor, young & elderly will feel the biggest impacts.

Michael Barberi
4 weeks ago

Ellen,

You might be right, but your opinion is pure speculation. What we do know is that something has to be done to make Social Security solvent and this means amending it....and that means increasing the age for full benefits or other means. No Democrat or Republican wants to address this.

I am sure you will agree with me that the current tax system must be significantly changed because it is not working for individuals or businesses. Our corporate taxes are one of the highest in the industrialized world and we need to stimulate business investment and create jobs.

Make no mistake about what I am saying. I don't mind taxing the the top 1%, those making over about $450,000 a year, and reducing the tax liability for those making under $250,000 with more of it going to those making between $100,000 and $200,000. At present, families making about $50,000 or less a year pay little or no tax. Under the GOP tax plan more people will pay little or no tax.

There will be host of amendments to the GOP and Senate bills with Democrats crying that it benefits the rich and Republicans saying it will help the middle class. I don't let all of this stuff sour my outlook. We need a tax cut and much more.

Chuck Kotlarz
4 weeks ago

Michael, to stimulate business investment, put a democrat in the white house - see my reply above to Mr. Agostini. To create jobs, put a democrat in the white house. Clinton and Obama created more jobs than the last six republican presidents combined.

Taxes should increase for any corporation not paying a living wage. Why reward companies that leave behind the bottom forty percent of wage earners?

The Income share of 95% of America has overall fallen 15% since 1980, much of the income absorbed by the top .1%. Apply a 90% tax rate on income over $10 million, restore a 77% tax on estates over $10 million and apply a 25% capital gains tax.

Stuart Meisenzahl
4 weeks ago

Chuck
And your proscription for spending cuts are exactly what?
If you confiscated out right today the entire total wealth of the 1%ers ($10.5 Trillion) you could only pay off half of the current $20+Trillion National Debt.
Further, if you did that you would lose the annual 50% of total income taxes paid by the same 1%ers ( if you take all their wealth they will have no future income to tax!)
Also you might consider how many of the 1%ers' businesses would have disappeared because of such confiscation ...resulting in lost income taxes paid by employees and loss of corporate taxes, Social Security payments and Medicare payments.
While certainly unintended , our progressive tax system has already made us incredibly dependent on the financial health of the 1%ers. While your proposed tax increases would certainly make the US even more dependent on their financial health, you provide no information as to how much new revenue you could generate and consequently what the benefits of this increased dependency would be.

Given our current National Debt a return to average historic interest rates would totally absorb any possible new revenue your suggested tax increases could provide. So in addition to being a hostage to the financial health of the 1% ers, add in our dependency on the Federal Reserve maintaining absurdly low interest rates. The really bizarre connection between these two "dependencies" is that the massive increase in the wealth of the 1%ers over the past 8 years was generated by the Federal Reserve which through its reduction in interest rates to 0% levels has forced massive new infusions of cash into the stock market where as a result the wealth of the 1%ers has sky rocketed!
It would seem then that we have boxed ourselves into a situation that we cannot possibly tax our way out of. The only solution is to grow our GDP fast enough to be able to make this debt manageable despite the return of interest rates to more historic levels. THAT CAN NEVER BE ACCOMPLISHED WITHOUT CONTROLLING SPENDING !!
And an increase in taxes such as you suggest is itself a recognized impediment to the growth required to solve this problem.

Chuck Kotlarz
4 weeks ago

Stuart, the overall income share for 95% of Americans has fallen 15% since 1980. With a shrinking U.S. mass consumer market, what’s the obvious candidate to grow profit, tax cuts.

Social security has not escaped the chopping block. When the bottom 95% of wage earners lost 15% of their income share, social security lost fifteen percent of its revenue.

In the twenty years of highest GDP growth since 1930, all but three had top marginal income tax rates between 70 and 94%.

Stuart Meisenzahl
3 weeks 3 days ago

Chuck
One last time .....in this discussion the only causal relationship of any importance is the relationship between annual "spending and annual tax receipts". Since you absolutely refuse to address "spending" it is senseless to discuss the proper rate of tax in any serious fashion. Your bantering about various statistics implying causality where there is only at best temporal correlation is an exercise in deflection!

Chuck Kotlarz
3 weeks 1 day ago

Stuart, Trump named the tax bill, “Cut, Cut, Cut”, which benefits primarily the top .1% and continues the “make the rich richer” trend that began with the 1981 tax cut. “Cut, Cut, Cut” raises the national debt a trillion dollars continuing the rising debt trend that began with the 1981 tax cut.

“Cut, Cut, Cut” makes the usual GOP trickle down claims, claims that disappear in history. Clinton and Obama created more jobs than the last six republican presidents combined. Business investment since 1947, as a share of GDP, rose 1.5% with a democrat in the White House and fell 1% with a Republican in the White House.

Feel free to explain the causal relationship between tax cuts and trickle down.

Stuart Meisenzahl
2 weeks 6 days ago

Chuck
You have yet to cite anything other than generalities to claim the average 1% ers will be the beneficiaries of the proposed tax bills.
And your conclusion is demonstrably wrong in as much as the top tax rate is about the same or greater for those 1%ers than the current rate......not to mention the 1% ers loss of deductions in whole or in part for state and local taxes. The top rate in the House Bill is an astounding 45.6%!....a full 6 points higher than the current top rate.

Further the vast majorities of Americans do not itemize deductions and under both proposed tax bills their standard deduction is doubled ....for a married couple it is $24,000....single it is $12,000. They all benefit.
There is a small slice of sub 1%ers ...I believe between$450,000 and $800,000 who are better off depending on whether they will be subject to the loss of a very big state and local tax deduction...see New York , New Jersey , and California
I have never suggested there is a causal relationship between reduced taxes and any claim for trickle down economic effect. The reason is simple:....everything depends on controls on Federal spending and no causal relationship could ever be established without analyzing the impact of such spending increases and decreases in conjunction with the tax rate change.. Total Tax receipts have in fact increased significantly following each historic tax reduction indicating a positive effect in the making but there is no way to reach a conclusion without analyzing any spending changes.

Once again you try to use the party of White House occupant as a fulcrum for your argument, and once again I remind you the the control of Congress = control of both tax policy and spending policy. Clinton's last term is the best example where a Democrat in the White House and the Republicans in control of Congress passed tight spending controls , resulting in a projected surplus.

Michael Barberi
4 weeks ago

Chuck,

Obama's policies resulted in anemic growth in the US economy. The jobs created were mostly temporary, short term and low paying jobs. Whatever positive results were achieved by Obama were made after growing the national debt by $Trillions. Yet, Democrats are crying about the GOP tax plan that will increase the debt by $1.5 Trillion over 10 years. Hypocritically partisan? Since Trump took office the economy has grown 2.5%-3%, more than double what Obama ever achieved.

Taxing corporations for not paying a living wage would be injustice because there is a big difference between corporations who employ a significant percent of low wage workers, e.g., retailers, and those who hire higher paying and highly skilled workers. If you tax retailers, they will likely increase prices of their products and/or lay off workers. Your suggestion reflects a poor understanding of economics and business.

As for income inequality, this problem is highly complex and is more related to the lack of education and the skills needed for the 21st century as well as poverty rather than the reasons why the income of top 1% has increased. Even if you made community colleges free, it will take the desire and motivation (and basic educational proficiencies) to pursue further education and succeed.

You also ignore what I said, namely, I support reasonable higher incremental tax rates for the 1% (e.g., 40% over $450,000, 50% tax rate over $750,000, 60% over $5 million), less tax for the middle class and incentives for businesses who receive a tax cut to significantly increase investment. This is more reasonable and realistic than what you propose.

Chuck Kotlarz
3 weeks 6 days ago

Michael, yes, I should commend you immensely for support of higher taxes on income over $5 million. Thanks.

Joseph J Dunn
3 weeks 4 days ago

The concern that eliminating the estate tax would produce lower charitable contributions, as predicted by the Lily Family Foundation, conflicts with other reputable research on estate taxes and charitable giving. When President Bush proposed to drop the federal estate tax, similar concerns were raised, But Paul Schervish, professor at Boston College, pointed to research by colleague John Havens, that "a growing number of wealthy families are already shifting their financial legacies from heirs to charities" over the prior decade (1990s). Estates valued at $20 million or more showed strongest movement in that direction. Schervish pointed also to research by Aldona and Gary Robbins at the institute for Policy Innovation, who estimated that abolishing the estate tax would increase GDP by nearly one trillion dollars and create 275,000 new jobs during the next decade.

Also worth noting, from 1971 to 1980 charitable donations by individuals grew at an annual average rate of 1.3%. From 1981 to 1990, with lower tax rates, donations by individuals grew at an average annual rate of 2.3%. Charities were getting more donations from an economy that grew 29% from 1981 to 1990, compared to just 21.6% from 1971 to 1980.

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