Mr. Leithart serves as pulpit supply of the Reformed Heritage Presbyterian Church (PCA) in Vestavia Hills, Alabama. He is married with five children.
According to Aaron Wildavsky, the use of taxation and spending as tools of broader policy goals is the chief purpose of fiscal policy in modern welfare states. “Most money,” he writes, “is spent to affect citizen behavior rather than for direct government action.” This fact is little noted and analyzed. Yet it has become so much a part of the political atmosphere that even writers concerned with freedom accept the premise, and, instead of challenging the practice, seek to achieve their own agendas by the same means. This article is an attempt to examine the premises of “tax manipulation” from the perspective of a Christian political philosophy and to determine whether this use of tax policy is consistent with the idea of a free society.
Taxation has long been recognized as a powerful tool for achieving political, economic, and social agendas. Marx and Engels recognized the usefulness of taxation as an instrument of the proletarian revolution. In The Communist Manifesto, they summarized Communist theory in the slogan: “Abolition of private property.” Since the bourgeois system of private property was the “final and most complete expression” of “the exploitation of the many by the few,” it had to be scrapped, along with the bourgeois family, bourgeois education, and bourgeois nationalism.
The first step in this demolition of property was to be the rise to power of the proletariat, which would “use its political supremacy to wrest, by degrees, all capital from the bourgeoisie, to centralize all instruments of production in the hands of the state, i.e., of the proletariat organized as the ruling class, and to increase the total of productive forces as rapidly as possible,” all of which would initially require “despotic inroads on the rights of property and on the conditions of bourgeois production.” To this end, they urged the adoption, among other things, of progressive tax rates and the abolition of inheritance. Private property, Marx and Engels recognized, could be undermined by tax policies, and the undermining of private property would serve their revolutionary ends.
Another giant of modern economic theory, John Maynard Keynes, also viewed fiscal policy—taxing and spending—as a tool for larger, chiefly economic, policy goals. Alfred Malabre, Jr., summarizes the Keynesian approach:
Keynesian theory urges that government spending be stepped up during recessions, even if an appreciable budget deficit happens to be among the consequences of such stimulative measures. A corollary to this notion is the danger of a so-called liquidity trap, which may develop when money is pumped into public hands but is saved and not spent. As savings pile up, the economy noses down on account of lackluster spending.
The Keynesian solution, as it has often been applied by policy makers in postwar American recessions, is for Uncle Sam to spend until business recovers. According to this theory, tax reduction tends to stimulate the economy, by leaving more money in the hands of consumers, while tax increases work the opposite way.
Keynesian theory views fiscal policy as a tool to regulate aggregate demand.
Supply-side theory also emphasizes the importance of tax policy in the achievement of economic growth. Paul Craig Roberts distinguishes between Keynesian theory, which seeks to “manage demand” through tax policy, and supply-side theory, which focuses on the incentives produced by tax cuts. Supply-side theory, Roberts argues, pays no attention, as Keynesian theory does, to aggregate demand. According to supply-side theory, tax cuts stimulate the economy because they make savings, investment, and work more profitable, regardless of aggregate demand. Despite these differences, it is still true that Keynesian and supply-side theory both see tax policy as an instrument for the advancement of larger economic goals. The Keynesian uses fiscal policy to regulate demand, while the supply- sider uses tax policy to stimulate economic growth.
Finally, tax policy is seen by many as a tool for achieving a more “democratic” egalitarian distribution of wealth. By taxing the rich at confiscatory rates, and redistributing the money to those defined as “poor” (and to the bureaucrats who run Federal programs), the federal government seeks to equalize wealth. Herbert Schlossberg has argued that this form of egalitarianism is rooted in envy:
It has been a common assertion that envy is fostered by inequality and can be ended by equali-tarian redistribution. British economist E. J. Mishan believes that feelings of deprivation that cause envy will be eliminated in the process of equalization, and that the progressive income tax is the best way to accomplish that task. “Ideally . . . the tax should suffice to cover all the initial and subsequent claims necessary to placate everybody in the lower-income groups, and the stronger is this envy of others, the heavier must be the tax.”
Some feminists have found in tax policy a powerful tool for achieving their social agenda. In the United States, tax policies tend to force families into a more egalitarian mold, even when the families don’t accept feminist ideology. George Gilder has written:
The United States is enacting many of the policies that brought sexual suicide to Sweden. Despite the defeat of the Equal Rights Amendment and universal day care, the feminists are gaining their ends piecemeal. In particular, the decline in the value of the child deduction hasshifted the tax burden massively onto families with children. Through court decisions in favor of comparable worth, through the infiltration of the schools by feminist texts and teachers, through the day-care tax credits and other subsidies for the two-earner family, and through the rapid erosion of the joint income-tax return and the housewife’s right to social security, feminists are winning quietly by legal and legislative action what they cannot win in referenda.
Should Tax Law Be Changed?
Faced with these facts, some conservative writers are advocating changes in tax law that would encourage traditional family structures and large families. Allan Carlson, a pro-family conservative, proposes “a somewhat progressive income-tax structure that recognizes and supports marriage.” Specifically, “the tax system should give strong preference to children as national treasures.” To this end, “Congress should: (1) double the personal exemption, for children only, from the current $2,000 to $4,000 per child; (2) expand child-care tax credit into a universal credit set at a fixed amount of $750 per child, available to all families with a preschool child . . . ; and (3) create an additional universal Dependent-Child Tax Credit of $600 per child.” These incentives would encourage larger families, without forcing mothers to choose between family and career.
Demographer Ben Wattenberg also advocates changes in tax policies that would encourage larger families. The federal government should not only encourage large families, but should encourage women to stay home with their children. How? “Give them money. Lots of it, in order to at least partly compensate for lost earnings.”
A different argument for pro-family tax policies is offered by Bryce Christensen, writing in the Rockford Institute% Family in America newsletter, who observes that traditional, two-parent families are statistically healthier than broken families. It is unjust, therefore, for intact families to carry so heavy a burden for health care. Governments “must either impose values or impose costs,” and public policy ought to strengthen, rather than weaken, the family. Christensen maintains: “Government affirmations of marriage and legitimacy might marginally restrict the freedom of some, but government indifference to these standards will mean economic injustice for all those who safe, guard their health by making the personal sacrifices that family life requires.”
In other words, these writers urge the use of tax policies to achieve anti-feminist goals. In my judgment, the goals of these policies are laudable, and these proposals are preferable to current policies. But what about the means of achieving these goals? As a Christian, I would ask the further question of whether such policies are consistent with a Christian view of the role of civil government.
Defining the Role of Civil Government
This question requires an examination of several related issues. First, what is the function of civil government? Romans 13:1-7 is the classic scriptural text on the role of the civil ruler. According to Paul, the main function of the ruler is to execute God’s vengeance, that is, to punish wrongdoing and to “praise” those who do right. On the other hand, Scripture strongly condemns rulers who claim absolute sovereignty over their subjects. Nebuchadnezzar was reduced to a beast because of his arrogance (Daniel 4:28-37). Under God, the civil ruler has a legitimate and positive role to play in a free society, but he is not called to control the lives of law-abiding citizens.
Second, what is the nature of the family? Taking a biblical approach, we discover that in the New Testament, the Christian Church is the Christian’s true family, and his commitment to the Church is more absolute than his commitment to his blood family. Jesus said in the strongest terms that we must break our ties to our blood relatives if they conflict with our loyalty to Him and to His people (Luke 14:26). Loyalty to the blood family is not absolute. Promotion of the blood family is less crucial than the pro-family conservative maintains. This is not to say that the family is unimportant, or that we should neglect the family. Rather, it is simply to say that the Church is more important.
Further, it is clear that a person can be healthy and can make contributions to society even if he has no family. From a Christian perspective, we could note that Jesus was the perfectly healthy Man, and never married. Paul never married. The New Testament clearly presents marriage as a calling (I Corinthians 7). It is suitable for some, but unsuitable, for various reasons, for others. Family,like marriage, is a calling. Some men are called to be husbands and fathers; some are not. Some women are called to be wives and mothers; some are not. Even some married couples might not be called to become parents. Men and women are normally intended to live in families, yet men and women can live healthy lives and promote the good of others without either marrying or bearing children. Though the Bible does envision strong families, it does not view the family as a salvific institution, as some conservative writers tend to do. Leaving aside for the moment the theological and biblical arguments, it is still the case that there are many single persons who make substantial contributions to the good of society.
Once we qualify the importance of the family, we are forced to the conclusion that promoting the family ought not to be the supreme test of the rightness of a public policy. Adherence to or consistency with norms of justice is our standard.
Faith and Economics
All of this suggests that the tax policies of a civil government should not seek to manipulate people into commitments to which they are not called, or penalize them for failing to adhere to the social goals of the rulers. Christensen admits that his recommendations involve “marginal” restrictions of freedom for single men and women. But why should men and women who have been called to singlehood have their freedom restricted in any way? More basically, Christensen’s analysis tends to assume that people remain single for selfish reasons, because they do not want to make the sacrifice. But this is not true in every case. Even if it were true in the majority of cases—an unprovable assumption—tax policy would not solve the basic problem, which has more to do with faith and commitment than with economics.
Having outlined some biblical principles of both family and civil government, we can raise a more precise question: What role is the magistrate to play in the family? The one specific biblical warrant for intervention in the family by civil judges—i.e., the punishment of incorrigible juveniles—involves capital punishment of a criminal (Deuteronomy 21:18-21). There is no specific biblical warrant for other kinds of state intervention, though it is possible to extrapolate from this case law to other criminal cases. But one cannot infer from this passage a general warrant for civil oversight of family life. As a general principle, interference with family life by civil officials should be limited to punishment of criminals.
This conclusion is also supported by a consideration of the question of property rights, When tax laws promote certain uses of money or certain forms of conduct, the framers of those laws are implicitly claiming that they know best how a person’s wealth should be spent, how many children he should have, and whether his wife should work. The issue here is, who has the right to make decisions about the use of property or the structure of family life? Does the civil ruler have the right to erect obstacles in the way of certain perfectly legal behavior, or to clear the path for alternative, equally legal behavior? More bluntly (if less precisely), the question is, who is the steward of wealth and property, the civil magistrate or the family and individual? Who is the head of the family, God or Caesar?
Through their tax regulations and policies, Congress and the IRS implicitly claim the right to determine how resources are best used; they claim, in short, a right of ownership. In a free society, the choice of whether to borrow or save and invest would he left to the individual and family. Decisions about family size and structure would be made by the family, without the added pressures of tax policy. It is not the civil government’s place to encourage one result or the other.
Of course, Christensen is correct that tax policy is not neutral in relation to the family. It is either pro- or anti- family. But there is more than one way for taxation to be pro-family. Freeing the family from manipulative taxation is just as pro-family as subtle changes in tax law. Using the tax system to adjust economic and social conduct politicizes the whole of society, and is inherently, if only implicitly, totalitarian.
6. Paul Craig Roberts, “’Supply-Side’ Economics: Theory and Results,” The Public Interest (Fall 1988), pp. 16-36. Opponents of supply-side economics see the “Reagan recovery” as a classic Keynesian recovery, stimulated by Federal spending huge deficits, and tax reductions.
7. Herbert Schlossberg, Idols for Destruction: Christian Faith and Its Confrontation with American Society (Nashville: Thomas Nelson, 1983), p. 103. The quotation from Mishan is from “A Survey of Welfare Economics, 1939-1959,” The Economic Journal (June 1960), pp. 247-48.
9. The practice of using taxation to protect the family is ancient. James Coffield describes the “pro-family” inheritance tax of Augustus: “Augustus legislated against celibacy, rewarding fathers of families and inflicting certain disabilities on celibates and married men without children. For example, Unmarried men could not take inheritances or legacies, except from the nearest relatives; while married men who were childless could take only half the amount.” (A Popular History of Taxation [Leaden: Longmans, 1970], p. 25)
10. Allan Carlson, “A Pro-Family Income Tax,” The Public Interest (Winter 1989), pp. 75-76. On President Bush’s proposal of a universal child credit, see “Them’s the Breaks,” The New Republic (February 27,1989), pp. 7-8. The New Republic editors laud Bush’s proposal as “an interesting synthesis—liberal in its attention to the needs of poor people, and conservative in its avoidance of ‘anti-fam-ily’ incentives for using day-care centers. Whereas the [Democratic] Act for Better Child Care would reimburse only payments made to government- certified day-care providers, the Bush proposal would leave parents free to send their child to the next-door neighbor, to grandma’s, or to an inlaw’s.” In fact, the editors rightly characterize the proposal as “really just an income supplement for poor working families with children.”
11. Ben Wattenberg, The Birth Dearth.. What Happens When People in Free Countries Don’t Have Enough Babies? (New York: Pharos Books, 1987), pp. 150-51. Wattenberg’s subtitle reveals his preoccupation with the foreign policy implications of low birth rates.
12. I consider the Family in America newsletter one of the most helpful publications available. I have learned a great deal from read-inc the essays printed there, and my challenge at this point should not be construed as an attack on the institution or its publications as a whole.
14. Incredibly, Ben Wattenberg suggests Eastern European Communist nations as models for pro-natalist tax policies: giving money to parents who have children “is an important part of the solution that has worked at least for a decade or so with those dear Communist governments in Eastern Europe.” See The Birth Dearth, p. 150; also pp. 141-44. On pp. 143-44, Wattenberg says, “if we were to follow the workable and decent parts of the Eastern European model, and adapt them to free circumstances, we are talking about using enormous resources.” Eastern European nations provide not only cash grants to parents, but “day care, scholarships, maternal leave, [and] housing allowances.” (p. 142) Clearly, Wattenbarg is no fellow traveler, and I am far from saying that pro-natalist policies are wrong because Eastern European nations employ them. My argument is rather that the Eastern European model cannot be “adapt[ed] to free circumstances” because this model assumes an enslaved populace, whose entire Me is centrally directed.