Bishops urge Congress to ‘fix fundamental flaws’ in final tax reform bill

Senate Majority Leader Mitch McConnell, R-Ky., answers a reporters question during a news conference Saturday, Dec. 2, 2017, in Louisville, Ky. The Senate passed the tax bill early Saturday morning with a 51-49 vote. (AP Photo/Timothy D. Easley)

WASHINGTON (CNS) -- Congress must "fix the fundamental flaws" in both the Senate and House versions of the tax reform proposal as lawmakers try to reach an agreement on a final bill, said the chairman of the U.S. bishops' Committee on Domestic Justice and Human Development.

Bishop Frank J. Dewane of Venice, Florida, the chairman, issued a statement Dec. 2 in response to Senate passage of the Tax Cuts and Jobs Act in a 51-49 vote at 1:50 a.m. Washington time. Both chambers must meet in conference to reconcile differences in the two measures to bring a final bill to a vote.

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"Congress must act now to fix the fundamental flaws found in both bills, and choose the policy approaches that help individuals and families struggling within our society," said Bishop Dewane.

"We are reviewing the final Senate bill and will soon provide analysis about key improvements that are necessary before a final agreement should be reached and moved forward," he said.

"For the sake of all people -- but especially those we ought, in justice, to prioritize -- Congress should advance a final tax reform bill only if it meets the key moral considerations outlined in our previous letters," Bishop Dewane said.

"Congress should advance a final tax reform bill only if it meets the key moral considerations outlined in our previous letters," Bishop Dewane said.

He was referring to Nov. 9 and Nov. 22 letters from the U.S. Conference of Catholic Bishops addressing the House and Senate versions, respectively.

Quoting St. John XXIII's 1961 social encyclical, "Mater et Magistra," the bishops said that "decisions about taxation involve fundamental concerns of 'justice and equity,' with the goal of taxes and public spending 'becoming an instrument of development and solidarity.'"

Because tax-policy is "so far-reaching," they also urged Congress to provide "ample time for Americans to discuss the complexities of these reforms and fully understand their effects."

Signing the three-page Nov. 9 letter were Bishop Dewane; Bishop Oscar Cantu of Las Cruces, New Mexico, outgoing chairman, Committee on International Justice and Peace; and Bishop George V. Murry of Youngstown, Ohio, chairman, Committee on Education.

The letter referenced Bishop Dewane's Oct. 25 letter to House members in which he offered moral guidelines for lawmakers to consider in any tax reform proposal.

The guidelines focused on the country's responsibilities to care for the poor; form and strengthen families; develop a progressive tax code; raise adequate revenues for the sake of the common good; avoid cuts to poverty programs to finance any tax cuts; and incentivize charitable giving.

Overall, in light of those moral guidelines, the Nov. 9 letter called the Tax Cuts and Jobs Act of 2017 "unacceptable" as currently written and said it contained "many fundamental structural flaws that must be corrected."

The three signers praised the provision to double the standard deduction, saying that it "will help some of those in poverty to avoid tax liability, and this is a positive good contained in the bill." But the bishops also said that because tax-policy is "so far-reaching," Congress also must provide "ample time for Americans to discuss the complexities of these reforms and fully understand their effects.

The Nov. 22 letter, signed by Bishop Dewane, said that the Senate tax reform bill fell short.

"As written, (it) will raise income taxes on the working poor while simultaneously providing a large tax cut to the wealthy," Bishop Dewane said. "Tax breaks for the financially secure, including millionaires and billionaires, should not be made possible by increased taxes to families struggling to meet their daily needs."

"The Senate bill avoids some of the pitfalls of the House bill by not tampering with the adoption tax credit or the exclusion for employer adoption assistance programs, and by retaining the out-of-pocket medical expenses deduction, which is a lifeline for families facing serious and chronic illnesses," Bishop Dewane added. But he found little in the measure to commend.

Michael Barberi
1 week 4 days ago

I was disappointed that a tax on the very rich was not included in the Senate or House bills. However, if incremental tax rates for those making more than $450,000 but less than $750,000 were kept at 39.5% and those making more than $750,000 are increased to 50% and for those making more than $5 million to 60%, then these additional tax revenues could provide tax relief to the few middle class families that might see their taxes increase under the current Senate and House bills.

It took 31 years to change the tax code (e.g., 1986 tax reform) and getting the Congress to agree on things is almost impossible even with a Democratic or Republican majority. Every member of Congress proclaims they are willing to comprise for the greater good but not comprise on their principles. However, if everything becomes principle then nothing gets done. Congress needs to change their minds and hearts. Washington is far too biased and partisan.

J Cosgrove
1 week 4 days ago

The bishops need to make an examination of conscience for all the misinformation they have promulgated against the attempts to change the tax laws. There should be no claim made by a News article without facts/numbers to back them up.

Everything I read indicates the poor and middle class will have more money after taxes.

The rhetoric has been amazing. The authors of these articles should not be allowed to make any negative claims without evidence to support them.

John Walton
1 week 4 days ago

The Bishops are perpetrating a falsehood, purposefully, wittingly and should be headed to the Confessional box on Saturday afternoon. Owing to the elimination of deductions on state and local income taxes, virtual elimination of the deduction for mortgage interest the wealthy and near-wealthy are facing an increase in their effective marginal tax rates of 6 percentage points or more. Would remind the Bishops that their tax rates were increased from 36% to 39.6% by the Democrat congress, one of the reasons that the economic recovery during the reign of the Obamites was the slowest in post WW-II history.

Honestly, you wonder if the folks who write these pronouncements for the USCCB weren't left back a couple of times.

Chuck Kotlarz
1 week 4 days ago

John, 40% of America’s full-time workers’ earning under $20,000 would likely view a company owner’s $400,000 salary (1%er) as rich. For tax purposes, a $400,000 income falls about $250 million short of rich.

The rich ($250 million annual income or higher) will likely have a substantial income gain from a run up in stock prices (18% YTD) anticipating a corporate tax cut windfall. A $45 million “pay raise” for the rich gets taxed at a 23.8% capital gains rate not the 39.6% rate you referenced (perhaps inadvertently).

Adding one trillion dollars to the national debt provides money for the $45 million “pay raise”. Young people, many already swimming in debt from college loans, get soaked again with more national debt.

J Cosgrove
1 week 4 days ago

A few things:

first The people really happy about the rise in the stock market are the pensioners who are seeing their underfunded plans suddenly blossom. However, stock market prices are not real wealth since a quick selloff could destroy it as quickly as it rose. It is not real money if everyone decides to cash in.

second You have never indicated anything negative about how the good fortunes of the very rich affect the poor. The reason may be that there isn't any and the effect may be positive or just the opposite of what you imply.

You seem to be saying jealousy is the main issue. Maybe if everyone had a lot less, this jealousy wouldn't exist. But I doubt few of the poor would like less money just to see the rich have less too. The middle finger only works for so long.

My guess if the rise of the stock market rose under a Democrat president it also would not be good. Oh wait a minute that is exactly what happened under Clinton and then a capital gains tax rate reduction balanced the budget. I guess you are using that as a really bad scenario that should not be repeated. All those rich people paying those extra taxes. We cannot have that.

third You seem to be worried about the deficit. You must be particularly harsh on the Obama administration that saw it rise about $10 trillion on their policies. The Republican plan would cost 1/8 as much but that is if there is no economic growth as a result. What a great experiment to disprove all these Republican theories about economics and at a relatively cheap price.

As far as student debt, it appears that the current tax bill will cause a rise in their expenses of about $200 out of every $100,000. Why not look at those who have cause the massive debt in the first place. A few Jesuits might have some explaining to do.

Welcome to the Republican Party!!!! They are certainly not perfect but not 100% in the wrong like the Democrats.

Chuck Kotlarz
2 days 12 hours ago

Mr. Cosgrove, any individual earning less than $1,000,000 perhaps should fire their financial adviser.

The tax bill adds $1.5 trillion to the national debt. Essentially one hundred forty million tax filers invest $150 billion per year in the “tax cut” for the next ten years. What does an individual tax filer get in return for “investing” roughly $1,000 a year for the next ten years?

A senator (republican) notes income under $10,000 get a 5% tax cut. The bottom 50% of tax filers had an average income just over $15,000 which figures out to a $27 tax cut. They invest $1,000 and get back $27.

A 9% tax cut goes to income between $20,000 and $75,000 which comes to $370. Invest $1,000 get $370 back.

Income over $1,000,000 gets a 5% tax cut which figures close to $20,000. Invest $1,000 and get $20,000 back.

Lisa Weber
1 week 4 days ago

The bishops should have been speaking up against the corruption of Trump and his Republican minions during the campaign. The thievery of the Republicans was blatantly evident then. Now it's too late to do much until we elect a new Congress.

Vincent Gaglione
1 week 4 days ago

Some commenters here seemingly construe the content of the Bishops' letters and the articles here about them into "fake news."

They support the current tax legislation and much of its eventual negative impacts on the poor, the elderly, the disabled, and the working classes for a few extra dollars for those groups and a windfall of dollars for themselves in the short term. And when those negative impacts occur they will probably then quote scripture to remind us that we will always have the poor with us. They will remain comfortable no doubt.

Wealth is indeed relative. For the majority of us in the USA with decent paying jobs, investments, etc., we are wealthier than the vast majority of human beings on this earth. It will be equally as hard for us to enter the kingdom of heaven as the rich man to pass through the eye of the needle. A little more passion about justice for our own poor in the tax legislation might provide us with a touch more grease to slide into heaven if not through the eye of the needle.

J Cosgrove
1 week 4 days ago

They support the current tax legislation and much of its eventual negative impacts on the poor, the elderly, the disabled, and the working classes

Maybe the fake news is your comment above. Maybe the current tax legislation will help these people. It is certainly designed to do so. Maybe it won't but the intentions of the legislation is to promote economic activity and thus help the poor and middle class. The Republicans are not especially interested in helping the rich since they finance the Democratic Party and generally vote for Democrats.

Justify your comments or else this is nothing more than unjustified negative aspersions against people. I believe the Church has a name for that.

Charles Erlinger
1 week 4 days ago

Tax bills would, one would think, present marvelous opportunities for sharpening staffers’ creativity in title and talking point invention. But look at how little creativity has been exhibited.

Tacking the old propaganda standby term of “reform” onto a bill title or a talking point should have lost most of its effect by 2017, at least among voters old enough to remember the propaganda efforts of real experts during WW II. Or even among voters who have read a little history. There is a lot of evidence, however, that both of those population segments have grown vanishingly small. Those who still survive also recognize that whenever an obvious propaganda term like “reform” is used, the logical opposite is to be expected.

Congressional and administration leaders have already said, as plainly as they ever say anything, that the “reform” is not aimed at the tax laws as such, but at the various programs that Americans have been promised, not just by the president in the recent victorious election campaign, but by successive administrations over the last six or seven decades. We have recent, direct quotes from Ryan, Hatch, Grassley, Jordan, Trump himself, and others, that the ballooning deficit caused by the forthcoming tax law changes will be used as a principal reason to cut a number of entitlement programs, starting, according to their own words, in 2018, i.e., immediately.

And, as usual, the measures will be the opposite of “reform,” if “reform” is understood in its dictionary definition of “put an end to an evil by enforcing or introducing a better method or course of action.” If only those retirees and the poor had not spent all of their money on “booze, women and movies,” according to Grassley, they could get by on the reduced social security retirement, medicare, medicaid and children’s health that is in their future.

Stuart Meisenzahl
1 week 1 day ago

A quick google of "reform" definitions....found no reference to your " put an end to evil" attribution until I got to a midevil definition.

Charles Erlinger
1 week ago

Right. That’s the one that, it seems to me, the bill’s promoters are using to justify the effort.

Stuart Meisenzahl
6 days 20 hours ago

I believe you have just contradicted your own argument....you did use the word "opposite "

Charles Erlinger
6 days 17 hours ago

If my comment takes this much explanation it obviously should have been kept to myself.

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