Would a taxpayer revolt be immoral?

[losh14]

This thought has been on my mind for a few weeks and this is the first time I’m airing it publicly. The short question is:

Is it immoral to limit, by timing and by taking advantage of the tax laws, the tax revenues that the government receives from me personally, to the extent that the law allows?

In other words, a legal taxpayer revolt would have five planks:

1. To take up the maximum number of exemptions allowed, which means I’m not lending the government my tax refund, but instead receiving it through my paycheck.
2. If I am owed a refund, for me to file as early as possible
3. OR If I owe taxes, for me to file as late as possible, either final day or by filing for as many extensions as I am allowed.
4. AND writing my senators, my representative, the president and any other officials (HHS secretary, Heads of Budget & Finance committees, etc) stating that I am intentionally limiting the funding the government receives from me because of my objections to government policies.
5. AND, perhaps most importantly, encourage others to do the same.

The long question is thus:
I am aware that the government does good things on multiple levels. But I am appalled by the actions of our current elected officials and have been for quite some time. I am reluctant to call them leaders because leadership has been sorely lacking. This government has openly attacked the Catholic faith, continues to back abortion-providers and demonize opponents of abortion, engages in continued foreign aggression despite our President having received the Nobel Peace Prize pre-emptively. I honestly feel like the government has abandoned its primary responsibilities, which is to care for those needs that citizens cannot provide for themselves:

• Three months after Hurricane Sandy, survivors are STILL without power
• Funding for police, teachers and fire fighters continues to be cut
• Investigations into price-manipulation for vital drugs by so-called gray-market pharmacies have stalled, while shortages of everything from chemotherapy to TB treatments to anesthesia for mothers in labor are affecting hospitals coast-to-coast.
• Name your issue: Congress is ignoring it.

While I appreciate that the Affordable Care Act should extend health care to uninsured Americans, I have difficulty agreeing with how it was implemented. My employer complied immediately by implementing the required changes as soon as possible. The impact is that my employer-subsidized health insurance skyrocketed by 45% this year alone, and more than 60% since the bill’s passage. That, combined with tax increases in the form of the FICA restoration (which I was expecting), the cut to the child tax credit (which I was not expecting), and the wider tax brackets means that we’re trying to figure out how to handle the cut in pay … and that’s AFTER I upped my exemptions.

I’m not talking pennies here. We are doing what we’re supposed to do. While we had two incomes, we lived as though we were on mine alone and used my wife’s salary to pay down a car, her entire student loans and most of mine. We saved up to buy a new car to replace my 1999 pontiac and put 50% down so we could have low payments. We bought a much smaller home than we were told we could afford. When she left her job last year to stay home with our kids, as we had long planned, we were still clearing about 10% of my salary straight into savings. We’re frugal, we pay down debt, and we make a point of giving to charity.

Enter 2013. Costs skyrocketed. Gas is up, natural gas had a 15% price hike, electricity 10%, our property and income taxes are up, health premiums are up, food is more costly and, on top of all of this, our government continues to spend as though it’s not a concern. All the while, I’m being told that my faith is intolerant and my way of living backwards.

I do not support our government. I do not trust our leaders. I want to send them the message that I don’t wish to support them monetarily. Is it immoral to do so in this way by essentially fomenting a taxpayer revolt?

 

[Polycarp1]

No I wouldn’t think the things you listed are sinful and they are within the law. It sounds more like a fight or protest for social justice.

 

[Spider42]

Because it is an area I still study, my obligation to truth means that I do have to mention that the connection between the Affordable Care Act and insurance rate increases is not 1:1. The Kaiser Family Foundation study places about 25% of rate increases on ACA. Several academic studies have placed it around 15-18%. We do not know if market effects will recover any of this when exchanges are established, because most industrialized nations use a variant of a single payer system, like our Medicare, expanded coverage through the private sector and bringing competition into medical care, something that is not nomrally a good fit for typical supply/demand economics, is something new.

Also, as a matter of objective fact, non military discretionary spending is down, substantially, at both the Federal and State level since the great recession began. Remember, Katrina funding was only approved in exchange for spending cuts and Sandy funding was held up for similar reasons until just a few days ago by congress.

All that said, secular legal precedent is clear, you are allowed to pursue any and all legal means to minimize your tax bill.

Theologically, it is not quite as clear. It all comes down to intent and the judgement of your moral conscience. If I am reading your message correctly, you are unhappy with the results of the democratic process and want to specifically impose economic contraction. We have some specific obligations as citizens (see CCC 2238-2241), which include paying our taxes.

We also have the ability to resist civil authority in some circumstances (CCC 2242), but not generally armed resistance (CCC 2243). You are talking about non violent resistance, so let’s just focus on CCC 2242:

"The citizen is obliged in conscience not to follow the directives of civil authorities when they are contrary to the demands of the moral order, to the fundamental rights of persons or the teachings of the Gospel. Refusing obedience to civil authorities, when their demands are contrary to those of an upright conscience, finds its justification in the distinction between serving God and serving the political community. “Render therefore to Caesar the things that are Caesar’s, and to God the things that are God’s.” “We must obey God rather than men”:

<<When citizens are under the oppression of a public authority which oversteps its competence, they should still not refuse to give or to do what is objectively demanded of them by the common good; but it is legitimate for them to defend their own rights and those of their fellow citizens against the abuse of this authority within the limits of the natural law and the Law of the Gospel.>>" - CCC 2242, quoting Guadium et spes, emphasis in original

This really raises two questions. First, are you, in fact ‘refusing obedience’? Your intent seems to be, but is debatable, since secular law already permits you to minimize your taxes. On the flip side, tax havens, etc. are not generally in the spirit of Church teaching on our responsibility to civil authority.

Second, does your reason for disobedience (if any exists), rise to the level of “fundamental rights of persons”? The example you gave, of agreeing with the intent, but not the implementation of health care reform, probably does not, but you mention that you have many reasons.

So, again, it all comes down to your intent and judgement. One thing to be conscious of is that if your protest is on moral grounds (CCC 2242), you still have an obligation to respect the rule of law. That’s why when the Baltimore 4 broke into the office and destroyed draft cards with their own blood, they did so in broad daylight and submitted themselves peacefully for arrest and plead no contest. So if your protest (if it is a protest) ultimately pushes the boundaries of the IRS’s perceived gray areas, you could continue your protest and refuse to pay fines, etc., but ultimately, if secular law gives you, say, jail time, you would normally be expected to serve it.

 

[losh14]

Thanks for the responses so far. I’ll focus on Spider42 because of the depth of material. I’ll start with the moral nature of the question.

Spider42’s response is, first that the action would be legal (and without defining the limits of legally delaying tax filing, let’s just keep it as whatever those limits are), and second that the morality depends upon my intent.

If I am reading your message correctly, you are unhappy with the results of the democratic process and want to specifically impose economic contraction. We have some specific obligations as citizens (see CCC 2238-2241), which include paying our taxes.

As a clarification it’s not the democratic process - I did vote for some of these bozos - but rather the results of legislative and executive action and inaction post-election. Rather than call for impeachment or recall, my statement is that I find the actions of the Congress suspect and I do not wish to support them fiscally more than is absolutely necessary. Rather than economic contraction, which would mean a decrease in output (I stop going to work) I’m imposing a curtailment of credit. If I overpay on my taxes and due a refund, I’m essentially lending the government the amount of the refund and collecting, interest-free, from 3 to 15 months later. If I pay exactly what is due and forgo the refund, no loan is made.

To help put this into the framework you’ve helpfully suggested from the CCC, let’s divide my actions into two:

1. Maximizing my own cash flow by complying with the minimum of the tax law.
2. Encouraging others to do the same.

Is the first immoral? While tax havens don’t comply to the spirit of civic responsibility, I think this is a different matter. Tax havens reduce the taxable base, while my plan is to shift cash flow of tax payments. Rather than overpay and get a refund, I suggeset paying what is due and forgoing a refund. I can illustrate numerically in another post (I don’t wish to break the flow of conceptual thought).

So on the face of it I would say the first action is not immoral, regardless of what I intend to do with the extra money in my paycheck. And I say it is not immoral because the morality of spending money has to do with the action itself - if it is immoral to squander a tax refund on booze it is no more or less immoral to squander extra exemptions throughout the year rather than buying a stash on April 16th.

Where the morality comes in would be the additional cost that the government would have to incur in order to implement programs. The benefit to the government of overcollecting during the tax year and paying a refund of the overpayment is the same as receiving an interest-free loan. Given the choice between overcollecting $1 Bn and selling $1 Bn in Treasury notes, the former is preferable because the additional cost of interest is not borne. Money paid in interest is money not paid to medicaid, social security or teachers or firefighters. But I am reluctant to posit this as a moral bright line: for one, curtailing revenues might (and, I’d argue, should) signal that a decrease in spending is necessary, so that the responsible action during a defecit is to spend less. In other words, it’s not a given that the government will just borrow money to cover a shortfall, though that does seem likely. For another, I’m reluctant to take this argument to the logical extreme: if it is morally preferable to extend an interest-free loan then the moral prerogative is to reduce exemptions and withhold at a higher rate to reduce interest expense as much as possible. Such an action, taken en masse, may signal to the government the desire of the people to reduce the deficit by mitigating interest expense and reducing the need to borrow. But we cannot be certain that borrowing would just increase anyway.

So to bring back to the question of civic responsibility, we must address how much a taxpayer is expected to withhold. The letter of the law requires no more than an allowable number of exemptions to be taken, and as of now I do not see a clear moral preference for withholding more or less. The rule of law is ambiguous here between the two scenarios.

I’ll follow this post with the example I promised above and then address:

• The morality of the second point
• Spider42’s comments on health care law

And then open for discussion.

 

[losh14]

Example of how the revolt would work. Note that unlike a tax haven, in the revolt scenario the total tax payment would remain the same, the difference is between a cash flow of:

                       Status Quo                     Revolt

Months 1-12 $X monthly revenue $A monthly revenue
Month 14-15 $Y tax refund $B tax refund
Total to govt: 12(X) - Y 12(A) - B
Total to me: Y - 12(X) B - 12(A)

Where X > A, Y > B and 12(X) - Y = 12(A) - B

To illustrate, it’s the difference between paying $100 per semimonthly paycheck offset by a refund of $1200, and paying $50 per paycheck and receiving a refund of zero.

This is a concern because the difference between the scenarios, in other words the difference between 12X and 12A, is an interest-free loan to the US Government in the amount of (Y-B). In this example it’s $1,200, and if one million taxpayers switched from status quo to revolt, that would be the equivalent of withholding credit in the amount of $1.2 Bn. This would either mean that the government would have to decrease spending by $1.2 Bn, or borrow $1.2 Bn, which at the present Treasury 1-year note interest rate of 0.15% would cost $1.8 Mn in additional interest.

 

[losh14]

Now I turn to action 2, which is the encouraging of others to join in my revolt.

Here is where substance is added. If I revolt, and (to quote the previous scenario) cause the government to borrow $1,200 more than it would have otherwise and incur interest cost of $1.80, I have arguably reduced the common good by the amount of $1.80. That’s a pittance, mind you. And it’s arguably irrelevant if the interest goes to an American investor who uses it to feed his family. But the creditor and creditor’s actions are too remote for this moral analysis, I think - we don’t consider buying bread immoral if we suspect that the grocery store’s stocker is going to use his wages to buy drugs, for example.

So the $1.80 is too small to be grave but if I were to encourage revolt, and:

• Revolt is successful
• People are currently in compliance so that the revolt would mean a change
• The maximum scenario of 100 Mn households adopts this

The logical result is a scaling-up of borrowing costs to the government. Using the above example and estimated census, the government would have to borrow an additional $120 Bn at a cost of $180 Mn in interest (assuming the rates remain constant). That’s considerable even if it’s small relative to the size of the budget. It may mean the reduction in some expenditure or may simply mean an increase in borrowing. The reduction of expenditure may impact the common good (cut health care subsidy for poor kids), may improve the common good (prevent us from getting into another war), or have no net moral effect (reduction of unnecessary expenses). I think that if additional borrowing is the result, the moral case would be indeterminable. In either case I do not think we can render a moral judgment because the response is remote from us and we cannot accurately determine the response.

I think the greater shadow of moral doubt is whether my exhorting the revolt undermines the rule of law. If it encourages greater public discourse and civil disobedience, that’s one thing, but if it brings people to withhold tax payments altogether that’s quite another and I’d arguably bear some responsibility for it. I’d like Spider42 to speak more there.

Related to this is the moral intent within the letter. Clearly there are good facets to the affordable care act (more people insured) while there are detractions (higher premiums). As Spider42 noted, this isn’t my sole objection and my letter would include all those objections, not the least of which is the failure to compromise with religious institutions on the contraception mandate, the abandonment of survivors of Hurricane Sandy, and the continued reckless spending of the current administration and Congress. This last reason is, I think, the most proximate tie to the revolt: I do not consider the Congress to be a good debtor to me, I therefore reduce my line of credit to them.

I’ll next turn to comments on spending the health care law.

 

[losh14]

Health care law:

Because it is an area I still study, my obligation to truth means that I do have to mention that the connection between the Affordable Care Act and insurance rate increases is not 1:1. The Kaiser Family Foundation study places about 25% of rate increases on ACA. Several academic studies have placed it around 15-18%.

I do agree that our 60% increase in premia is not solely based on the health care law. Part of it is a reduction in subsidy from the employer, part of it is the poor health of my own co-workers, and part of it is the increasing cost of our services. It’s astonishing to look at my doctor’s visit from 2006 with an office fee of $51, and a doctor’s visit from three weeks ago with an office fee of $85.

But the impact from government action remains, and we shouldn’t minimize the impact of a 25% increase in cost or even an 18% increase in a large portion of the costs on a family budget: few of us get such an increase in our pay and some are unable to afford any increase in cost. We must also remember that the actual cost of health care is not likely to go down.

I can’t speak to the effects of the exchanges. I personally think that the implementation will be less transparent than hoped and we will see little reduction in control over payout from insurers or control over price by providers: in other words, I think we’ll still end up seeing inflation in health care outpace general inflation, even if by a smaller amount. Much of this is demand presented by an older and sicker population, which the bill can’t address. I’d have much preferred if the focus had first been on insuring the uninsured before adding requirements and costs onto existing plans.

Also, as a matter of objective fact, non military discretionary spending is down, substantially, at both the Federal and State level since the great recession began.

This is interesting because we again have to raise our debt limit, and as of my writing this note, the Senate passed a temporary suspension of the debt limit 34 minutes ago.

washingtonpost.com/politics/congress/senate-to-clear-debt-limit-increase-for-obama-as-washington-moves-on-to-new-fights/2013/01/31/f25762f0-6b7c-11e2-9a0b-db931670f35d_story.html

This is a contradiction - we’re spending less but borrowing more. The explanation is a shortfall in revenue, and that we continue to project deficits even while decreasing the deficit. So long as a deficit is run, debt will increase, hence the need to increase the debt limit. This is dangerous territory, and our elected leaders seem less concerned about increasing debt now than they have in the previous administrations that I remember.

Remember, Katrina funding was only approved in exchange for spending cuts and Sandy funding was held up for similar reasons until just a few days ago by congress.

Correct, and both scenarios were appalling. Shame on the Republicans and Democrats alike. A government’s first responsibility is to provide what the people cannot provide for themselves, and I think disaster aid should have greater urgency. Their house is woefully out of order, and given our wealth we should never be in a position to say “we can’t help the desperate until we take away from the needy”. The government could do much better in their stewardship of our tax payments.

I know some of this is emotional - two weeks ago my wife and I argued about whether to cut spending on groceries or put less into savings this month. We reached a compromise - I wouldn’t buy meat (I’m the only one who really eats it), and we’d put a little bit into savings. Meanwhile the President and Mrs. Obama party like rockstars with Beyonce and get saluted by people far wealthier (and more to the left) than we are. It’s not just an Obama thing - I do not ever remember a President intentionally toning-down the party because the nation was in recession or people were struggling. The fact is that we are governed by elites who like to spend our money as though it were their duty. I hope the revolt would change that attitude.

 

[habu16]

Also, as a matter of objective fact, non military discretionary spending is down, substantially, at both the Federal and State level since the great recession began.

I haven’t looked up any of the State level discretionary spending, but Federal non-defense discretionary spending is actually substantially up since 2007. Per the OMB (table 8.7), non-defense discretionary spending stood at $493.710B in 2007. It increased in 2008 and then sharply increased in 2009-2010 with the stimulus, then subsided at a somewhat lower level in 2011, with total non-defense discretionary spending for 2012 estimated at $609.816B.

 

[habu16]

This is a contradiction - we’re spending less but borrowing more. The explanation is a shortfall in revenue, and that we continue to project deficits even while decreasing the deficit. So long as a deficit is run, debt will increase, hence the need to increase the debt limit. This is dangerous territory, and our elected leaders seem less concerned about increasing debt now than they have in the previous administrations that I remember.

Spending has not decreased, not even close. With the exception of a small decrease in spending in 2010 compared to 2009, we are spending way more than we did even in 2008, the most expensive year of the Bush administration. Per the OMB (table 1.1), total on and off budget spending jumped from $2.983T in 2008 to an estimated $3.796T in 2012, a full $1,000,000,000,000+ more than the average during the last administration, which had set all the previous spending records.

I agree that this is very dangerous territory!

 

[thistle]

This thought has been on my mind for a few weeks and this is the first time I’m airing it publicly. The short question is:

Is it immoral to limit, by timing and by taking advantage of the tax laws, the tax revenues that the government receives from me personally, to the extent that the law allows?

In other words, a legal taxpayer revolt would have five planks:

1. To take up the maximum number of exemptions allowed, which means I’m not lending the government my tax refund, but instead receiving it through my paycheck.
2. If I am owed a refund, for me to file as early as possible
3. OR If I owe taxes, for me to file as late as possible, either final day or by filing for as many extensions as I am allowed.
4. AND writing my senators, my representative, the president and any other officials (HHS secretary, Heads of Budget & Finance committees, etc) stating that I am intentionally limiting the funding the government receives from me because of my objections to government policies.
5. AND, perhaps most importantly, encourage others to do the same.

The long question is thus:
I am aware that the government does good things on multiple levels. But I am appalled by the actions of our current elected officials and have been for quite some time. I am reluctant to call them leaders because leadership has been sorely lacking. This government has openly attacked the Catholic faith, continues to back abortion-providers and demonize opponents of abortion, engages in continued foreign aggression despite our President having received the Nobel Peace Prize pre-emptively. I honestly feel like the government has abandoned its primary responsibilities, which is to care for those needs that citizens cannot provide for themselves:

• Three months after Hurricane Sandy, survivors are STILL without power
• Funding for police, teachers and fire fighters continues to be cut
• Investigations into price-manipulation for vital drugs by so-called gray-market pharmacies have stalled, while shortages of everything from chemotherapy to TB treatments to anesthesia for mothers in labor are affecting hospitals coast-to-coast.
• Name your issue: Congress is ignoring it.

While I appreciate that the Affordable Care Act should extend health care to uninsured Americans, I have difficulty agreeing with how it was implemented. My employer complied immediately by implementing the required changes as soon as possible. The impact is that my employer-subsidized health insurance skyrocketed by 45% this year alone, and more than 60% since the bill’s passage. That, combined with tax increases in the form of the FICA restoration (which I was expecting), the cut to the child tax credit (which I was not expecting), and the wider tax brackets means that we’re trying to figure out how to handle the cut in pay … and that’s AFTER I upped my exemptions.

I’m not talking pennies here. We are doing what we’re supposed to do. While we had two incomes, we lived as though we were on mine alone and used my wife’s salary to pay down a car, her entire student loans and most of mine. We saved up to buy a new car to replace my 1999 pontiac and put 50% down so we could have low payments. We bought a much smaller home than we were told we could afford. When she left her job last year to stay home with our kids, as we had long planned, we were still clearing about 10% of my salary straight into savings. We’re frugal, we pay down debt, and we make a point of giving to charity.

Enter 2013. Costs skyrocketed. Gas is up, natural gas had a 15% price hike, electricity 10%, our property and income taxes are up, health premiums are up, food is more costly and, on top of all of this, our government continues to spend as though it’s not a concern. All the while, I’m being told that my faith is intolerant and my way of living backwards.

I do not support our government. I do not trust our leaders. I want to send them the message that I don’t wish to support them monetarily. Is it immoral to do so in this way by essentially fomenting a taxpayer revolt?

CCC 2240 Submission to authority and co-responsibility for the common good make it morally obligatory to pay taxes, to exercise the right to vote, and to defend one’s country:
Pay to all of them their dues, taxes to whom taxes are due, revenue to whom revenue is due, respect to whom respect is due, honor to whom honor is due.
[Christians] reside in their own nations, but as resident aliens. They participate in all things as citizens and endure all things as foreigners. . . . They obey the established laws and their way of life surpasses the laws. . . . So noble is the position to which God has assigned them that they are not allowed to desert it.
The Apostle exhorts us to offer prayers and thanksgiving for kings and all who exercise authority, “that we may lead a quiet and peaceable life, godly and respectful in every way.”

 

[Spider42]

This is interesting because we again have to raise our debt limit, and as of my writing this note, the Senate passed a temporary suspension of the debt limit 34 minutes ago.

We have to understand terms. The debt has exploded, it effectively doubled under the Bush administration (If you added $2T to your credit card, servicing that debt would cost you more to!) And non discretionary spending has gone up. Recessions both cut revenue and increase demand on existing programs. Medicare benefits, for example, are set, but health care costs continue to outpace inflation. High unemployment taxes unemployment insurance. People who qualified for disability benefits but did not collect them until they were unemployed. And so on. But discretionary spending has gone done, just look a the number of jobs that have been shed in the public sector. The only blip up was the temporary jobs for the census. State level discretionary spending has really imploded because states generally can’t carry unbalanced budgets the way the Federal government can.

The debt limit is often misunderstood. The administration doesn’t have a credit card or blank check. Congress controls the purse, and sets the administration’s budget in law. If Revenue falls short of the expenditures in law, treasury has to borrow. If borrowing hits the debt limit, Congress has to approve it. But it isn’t a blank check to the administration, it is more like, approval to work with the bank to pay the checks you, the Congress, wrote. It was raised 18 times under Reagan, 7 under Bush - and I don’t remember any howling then.

I haven’t looked up any of the State level discretionary spending, but Federal non-defense discretionary spending is actually substantially up since 2007. Per the OMB (table 8.7), non-defense discretionary spending stood at $493.710B in 2007. It increased in 2008 and then sharply increased in 2009-2010 with the stimulus, then subsided at a somewhat lower level in 2011, with total non-defense discretionary spending for 2012 estimated at $609.816B.

Your looking at ‘all non defense spending’, not discretionary spending. Part of that is debt service, which, as I mentioned above exploded in the Bush administration, part is social security, which has nothing to do with debt at all, it’s a national insurance program. A big chunk is medicare. The benefits are fixed, the cost of them continues to rise.

The Stimulus is also poorly understood. A huge portion of it was tax cuts, which isn’t an increase in government spending at all, it is a cut in revenue.

The Congressional Budget Office (CBO) does a great job of plotting this stuff out. The lion’s share of the deficit, which is what adds to debt, is a handful of things. The recession is a big one, the economy contracted almost 9% in the last quarter of '08, and the recovery has been very slow. Two protracted wars, wholly unfunded, was another. And the Bush tax cuts and Plan D drug expansion to Medicare are pretty large. The stimulus is barely a blip on the CBO charts.

I would have preferred not to mention it at all. It’s a distraction from the moral question. Also, our national economic IQ seems to have plummeted in recent decades. I don’t mean that as an insult. We have people howling about the deficit while fighting policies that cut the deficit and promoting policies that increase it. Then, after several years of howling about the deficit being the nation’s armageddon, the same people started howling about the ‘Fiscal Cliff’, which was nothing more than aggressive deficit reduction. No wonder people are confused! Anyway, I only mentioned it because I have an obligation to the truth.

 

[Spider42]

CCC 2240 Submission to authority…

I mentioned CCC 2238-2241 as well. But the quote at the end of 2240 is very important. It’s from Ad Diognetum. It’s why CCC 2242 is limited to fundamental moral issues.

I hate to over simplify, but the concept is that, by accepting the faith, we are not citizens of X who happen to be Catholic. We are more like ambassadors for the Catholic Church who happen to live in country X.

 

[thistle]

I mentioned CCC 2238-2241 as well. But the quote at the end of 2240 is very important. It’s from Ad Diognetum. It’s why CCC 2242 is limited to fundamental moral issues.

I hate to over simplify, but the concept is that, by accepting the faith, we are not citizens of X who happen to be Catholic. We are more like ambassadors for the Catholic Church who happen to live in country X.

Its up to the Government and elected officials to decide how your taxes are used or not used.
If the people don’t like it then they should use their vote to get these people out at the next election. That’s democracy.

 

[habu16]

We have to understand terms. The debt has exploded, it effectively doubled under the Bush administration (If you added $2T to your credit card, servicing that debt would cost you more to!) And non discretionary spending has gone up. Recessions both cut revenue and increase demand on existing programs. Medicare benefits, for example, are set, but health care costs continue to outpace inflation. High unemployment taxes unemployment insurance. People who qualified for disability benefits but did not collect them until they were unemployed. And so on. But discretionary spending has gone done, just look a the number of jobs that have been shed in the public sector. The only blip up was the temporary jobs for the census.

1. Yes, the debt effectively doubled under Bush. And yes, it has only increased ~50% under Obama. But while Bush added ~$5T to the debt over his 8 years in office, Obama has added ~$6T over just 4 years. Looking just at percentages/multiples is a convenient way to gloss over the real numbers.
2. Yes, non-discretionary spending has gone up, way up. And no, discretionary spending (at the federal level, at least) has not decreased at all. Look at chart 8.7 from the OMB that I cited earlier. Discretionary spending has increased substantially.

The debt limit is often misunderstood. The administration doesn’t have a credit card or blank check. Congress controls the purse, and sets the administration’s budget in law. If Revenue falls short of the expenditures in law, treasury has to borrow. If borrowing hits the debt limit, Congress has to approve it. But it isn’t a blank check to the administration, it is more like, approval to work with the bank to pay the checks you, the Congress, wrote. It was raised 18 times under Reagan, 7 under Bush - and I don’t remember any howling then.

I didn’t start paying attention to the economy and politics till the latter years of the Clinton administration, so I can’t speak for Reagan, but I sure howled about the debt limit increases under Bush, and am even more vociferous against them under Obama.

Yes, the existing debt ceiling debate is over prior expenditures. But when the ceiling is inevitably raised, it becomes about giving the government a blank check.

Let’s say the debt ceiling is raised to $100T in a month or two. The gap between $16.5T and $100T effectively gives the government a blank check. THAT is the issue I have with the debt ceiling.

Your looking at ‘all non defense spending’, not discretionary spending. Part of that is debt service, which, as I mentioned above exploded in the Bush administration, part is social security, which has nothing to do with debt at all, it’s a national insurance program. A big chunk is medicare. The benefits are fixed, the cost of them continues to rise.

Wrong.

Look at chart 8.7 again. It lists all discretionary outlays, not all non-defense spending. The chart doesn’t list debt service, and it only lists the part of Medicare and Social Security spending that are discretionary (pittances to the tune of around ~$5B each). An easy way to figure this out is to do a sanity check on the numbers. The US spent almost $3.8T in 2012. If I were talking about all non-defense spending, I’d be listing a figure around $3T, not something that’s just in the hundreds of billions.

 

[losh14]

We’re having a necessary discussion but I don’t want to lose sight of the main point. For now can we agree that:

1. Debt continues to increase, and that incurs additional interest cost, which is a less optimal use of funds (you can tell the economist in me - I was ready to say “pareto inferior”).
2. The spending isn’t a partisan issue but the fault of both parties.
3. We have an obligation to pay taxes and obey laws.

I want to return to my first question - would it be immoral to comply with the letter of the law on taxation with the intent of reducing the cash flow from tax revenue by paying exactly rather than overpaying? Note that I’m not talking about not paying taxes, but rather paying only what is necessary rather than overpaying. Tax refunds are because we overpay, withholding is at a higher rate than necessary.

At this point I’m leaning towards the revolt being immoral because I think the end-result would be more borrowing. If it’s deterministic (ie, “well, people are taking more exemptions, so our tax revenue in a given month is lower even if total revenue is the same, so we have to borrow more”) then the burden of the action is mine.

 

[Spider42]

Its up to the Government and elected officials to decide how your taxes are used or not used.
If the people don’t like it then they should use their vote to get these people out at the next election. That’s democracy.

I, personally, agree. In fact, my response has been somewhat the opposite of the original poster. Within a decade of the loss of my family, I had effectively retired from my first profession, but it was very lucrative. Most of my income since has been from investments. I waive most of my compensation from the shelter and school, but have been accepting health care (I’ll drop that when I go onto Medicare). So I feel distinctly under taxed and don’t take any special steps to lower my tax bill at all.

But I respect that every fellow Child of God must follow the certainty of his or her moral conscience (CCC 1790), so I tried to simply stick with the moral tensions above.

Look at chart 8.7 from the OMB that I cited earlier. Discretionary spending has increased substantially.

Wrong.

Look at chart 8.7 again.

My brother, what would you have me say? You keep pointing to one budgetary chart and are now attempting to reason that it has a particular meaning. Of course, I could be in error, but if so, my mistake is shared by virtually all economists and investment forecasters, liberal and conservative alike.

But I don’t teach economics, my focus is now on Holy Scripture, theology, and Canon Law. If you are interested in the point of view of economists and investors, you could start with a Google search for “discretionary spending”. The first few links are definitions. On the first page is this:

mediamatters.org/research/2013/01/30/foxs-varney-claims-historically-low-discretiona/192458

Please do not spend any time belittling the ‘source’, I’m picking this link for three reasons, it is very recent, it pops up on the first search page, and the report points to sources you should use, the CBPP and CBO. These both have excellent track records, take steps to remain non partisan, and are frequently cited by the Magisterium, the authentic teachers of the Church.

But even the charts in the article above can be difficult to understand. You might say ‘look, the line goes up a little under Obama, then drops down in the future’, but that particular chart is in percentage of GDP. GDP contracted, substantially in the last quarter of '08 and the first quarter of '09, so you have to understand the scale. Also, all spending, including discretionary spending, is controlled by law, often spanning fiscal years, so future years often best reflect the legislation of the current administration. They don’t always come to pass, because future congresses can change the law, but they are based on what the President has signed into law.

If you are truly interested in economics and you are truly interested in Catholicism, they are not two separate things. Rome and the local princes have spoken more and more frequently on this subject in general and the US in particular in recent years. Points like this:

cjr.org/united_states_project/the_true_cost_of_national_secu.php

Which I just read in an article today, have been made by the local princes for some time. It also points out just how difficult it is to truly parse out the budget. Remember, the Church views socially just economic development as a life issue. It is probably well worth hearing what they have to say:

usccb.org/issues-and-action/human-life-and-dignity/

 

[habu16]

We’re having a necessary discussion but I don’t want to lose sight of the main point…

I want to return to my first question - would it be immoral to comply with the letter of the law on taxation with the intent of reducing the cash flow from tax revenue by paying exactly rather than overpaying? Note that I’m not talking about not paying taxes, but rather paying only what is necessary rather than overpaying. Tax refunds are because we overpay, withholding is at a higher rate than necessary.

At this point I’m leaning towards the revolt being immoral because I think the end-result would be more borrowing. If it’s deterministic (ie, “well, people are taking more exemptions, so our tax revenue in a given month is lower even if total revenue is the same, so we have to borrow more”) then the burden of the action is mine.

My apologies for getting sidetracked!

I don’t think it would be immoral. The government does not spend the same amount per month, so whether you pay $100 in a particular month in taxes vs $250 that month won’t necessarily result in more borrowing.

My line of reasoning is that our moral obligation extends to paying what we owe to the government per the letter of the law, not a penny more and not a penny less. If the government cannot then handle its finances to properly utilize its monthly cash flow, that’s its problem and out of our moral responsibility.

 

[Spider42]

At this point I’m leaning towards the revolt being immoral because I think the end-result would be more borrowing.

I can’t really agree with all your points because, again, I rely on things like the CBO, which shows our deficit shrinking fairly quickly and a pretty manageable prognosis for debt. The immediate concern is jobs and growth, the longer term concerns are military spending and healthcare spending. But I do not want to debate it because, again, I think it detracts from the moral question at hand.

On that front, I can only give my judgement, not a deterministic answer. I would say it is immoral for me because priorities have not changed in your scenario, only funds. Rome and the bishops have both stressed that our cutting so far has been disproportionately at the expense of the poor and other of society’s weakest members.

I share the bishops’ concerns about things like the Ryan budget, which slashes food stamps and then gives billions more to the Pentagon than it has asked for - all while doing nothing meaningful about debt or the deficit.

The pope put it very succinctly in his last two messages to the US. If you love war and hate taxes, you get debt. If your healthcare system focuses on the common good instead of the greed of unregulated capitalism and if you work on true peace, not the absence of violence through mutual threat, you prosper.

But, again, I would not presume to judge other Catholics whose moral consciences bring them to different conclusions.

 

[ahollars]

It’s your money. Keep as much of it as you can legally get away with. :twocents:

 

[Spider42]

It’s your money. Keep as much of it as you can legally get away with. :twocents:

For Catholics, wealth isn’t strictly “ours”. All that we receive is by the grace of God and those of us with more have a special responsibility. This isn’t just a generic Catholic principle, it was placed on American Catholics in particular by Blessed John Paul in “Ecclesia in America”.