By Rev. Jennifer Butler, CEO of Faith in Public Life
In response to public outcry over his newly revealed tax return, Trump responded that it was a smart move on his part to take advantage of a tax benefit for real estate investors that allowed him to write off twenty years in taxes, paying himself a handsome salary while stiffing his workers.
Our faith traditions teach us that this is not a smart move: it is a sinful move born of a broken economic system that too often fails to make the well-being of people its top priority.
Americans do not think about economies or tax policies as moral issue but they are. Both the prophets and Jesus consistently critiqued practices that disadvantaged the poor. The Year of Jubilee in Leviticus was a set of laws that addressed growing inequality among God’s people. The prophet of Isaiah warned his people: “Woe to those who enact evil statutes… so as to deprive the needy of justice and rob the poor of my people of their right (Isaiah 10:1-2).” Jesus echoed Isaiah when he said had come to bring good news to the poor, freedom to the oppressed and proclaim the year of the Jubilee (Luke 4).
Contrary to biblical teaching, free-market advocates argue that the economy is not a moral space, but one that relies on a free and fair market. Placing moral limits on the economy, they argue, would hinder this flourishing.
But the information revealed in Trump’s tax returns shows that the idea that the economy is governed by a free or amoral market is clearly naïve. Our economy is governed by unfair laws that benefit a few while harming many.
Consider how Trump’s actions affect the rest of society. Loopholes in our tax code allow wealthy business owners to deduct net operating losses (NOLs) against other income to lower their taxes rewarding them for failed investments. While we might all perhaps love this benefit, it doesn’t apply equally to all Americans. If I were to risk investing my savings in a small business that failed, I wouldn’t get a tax write off, I’d suffer the consequences of a failed venture.
It’s not fair that the wealthy are forgiven for their failures or catastrophic decisions while the rest of us face consequences. But the greater travesty is that while tycoons benefit, the rest of us pay the price for their tax breaks and bail-outs.
While Mr. Trump took advantage of a shocking tax loophole for real estate investors to write off nearly a billion dollars in taxes for the next twenty years, he paid himself a handsome salary and stiffed all of his contractors and investors. He also cheated his neighbors and fellow Americans since tax breaks for millionaires cost money. Trump’s loopholes cost taxpayers millions of dollars in tax revenue that should rightly go to repairing roads and bridges (creating more jobs); investing in education and affordable college, and making housing more affordable for families.
This tax loophole also added to the volatility of real estate markets around the country. As investors scoop up property using strategies that don’t require them to think responsibly about their business model or the impact of their investments on communities, families have struggled to find affordable housing or have been driven out of their communities through gentrification. Many families who pursued financial stability through home ownership now find their investments under water while the wealthiest developers and real estate magnates made out like bandits.
Religious organizations who are at the front lines of ministering to struggling congregants and delivering services to the poor have recognized the impact of such policies on our people. Religious organizations like the one I lead, Faith in Public Life, advocate for federal budgets that protect the poor and give everyone a fair opportunity at success. Coalitions like the Circle of Protection, which includes evangelicals, Catholics, Protestants and Jews, assert that the federal budget is a moral document. They advocate for tax policies like the Earned Income Tax Credit which helps low income working families whose wages are too low to cover their cost of living.
Pope Francis has frequently called on world leaders to establish economies that enable communities to flourish. He has warned against “self-serving tax evasion” which arises out of a “thirst for power and possessions” that “knows no limits.” The Pope has reminded us that an economy of exclusion violates God’s commandment ‘Thou shalt not kill.’ Policy debates over taxation may seem abstract, but these and other economic policies are life and death issues for most Americans as they struggle with poor health care, hunger, homelessness and lack of opportunity.
Nathaniel B. Davis argued eloquently this week that just as we have a Just War Ethic to govern how governments wage war, so too must we have a foundational morality for our economy. Theologians and ethicists helped shape Just War theory. Religious leaders and thinkers must now advocate for an ethics for a Just Economy and ensure our national leaders implement policies that are in line with such ethics.
For starters we can advocate for national leaders to fix our tax code. Both political parties have failed to make our tax system more fair by eliminating loopholes and reining in the banking industry so that American families and consumers aren’t harmed by reckless business activities. Perhaps the Trump campaign’s will change its own proposed tax policies which currently benefit a few like himself at the expense of American families.
The good news is that the economy can be transformed from an immoral space to a moral one as Nathaniel Davis suggests. Such a transformation will require strong leadership from faith communities who know first-hand the human costs of our failed policies. Whatever the outcome of this election, faith communities will be advocating for an economy that makes human beings, not selfish gain, its first priority.
Jennifer Butler is the founding CEO of Faith in Public Life. Before leading FPL Jennifer spent ten years working in the field of international human rights representing the Presbyterian Church (USA) at the United Nations and is an ordained minister. While mobilizing religious communities to address the AIDS pandemic and advocate for women’s rights she grew passionate about the need to counter religious extremism with a strong religious argument for human rights. Out of that experience she wrote Born Again: The Christian Right Globalized. Jennifer and her husband Glenn together run Iona DC: A Christian Community in downtown Washington, DC.