DETROIT, Mich. – In approving “Tax Justice: A Christian Response to a New Gilded Age” the General Assembly of the Presbyterian Church (USA) seeks a re-write of the U.S. tax code to make it expressly “progressive, transparent, sustainable and adequate.”
Chris Iosso, Presbyterian Mission Agency staffer and an ordained PCUSA minister who continues to accept his own annual tax-free ministerial housing allowance as evidenced by 2014 terms of call approved May 20 on the consent agenda of Hudson River Presbytery, is the chief architect of the plan. Notably, that particular tax avoidance measure that benefits all active and retired clergy is not recommended for reform.
The reforms instead seek to target individual tax deductions with the goal of “capping benefits less needed by high-income individuals and families.” According to the PCUSA, those include:
- mortgage interest deductions
- 501(c)3 charitable contributions deductions
- 501(c)4 charitable contribution deductions
- exclusion of capital gains on home sales
- property tax cap for senior citizens
- deductions for state taxes and municipal bond interest, for “high net worth households.”
The mortgage interest deduction is targeted because it “privileges those who borrow the most” and “should be capped at a level that has a meaningful relationship to average home costs,” which the PCUSA now defines as reflecting “reasonable housing needs rather than luxury market subsidies.”
Charitable contributions are targeted because they are “only deductible by the approximately 25 percent of taxpayers who itemize deductions.” But the report never quantifies the percentage of the PCUSA’s 1.8 members that are in that 25 percent of Americans. Nor does the report examine the potential negative impact such a revision of the tax code would have on the support of individuals for churches who depend on charitable contributions for the sustainability of their mission.
The PCUSA now advocates for the elimination or raising of so-called “capping” of property taxes for senior citizens because, it says, that “privileges many elders while burdening younger citizens of similar income.” The main flaw of the cap is that it does not “adhere to the principle of progressivity” and offers means testing as a solution.
Commissioners did rise in opposition. Joan Johnson, a ruling elder from Santa Barbara Presbytery, said, “I find this overreaching. I don’t find it pastoral. I don’t see how it serves the local church. I speak against it.”
Joining Johnson was an elder from New Brunswick Presbytery who said, “Persons of good conscience can disagree on what’s before us. Proposals like this are injurious to the church at large. This is going to hurt local churches.”
Those moderating voices were drowned out by those who want to see “a redistribution of wealth in this country,” and the assembly committee passed the measure onto to plenary by a 47-12 vote. The General Assembly overwhelmingly approved the measure 425-170. The progressive “Tax Justice” report and all of its recommendations were adopted as the new social witness standard of the PCUSA by the assembly.
“Tax Justice” grows out of an Advisory Committee on Social Witness Policy (ACSWP) report approved by the 2012 General Assembly called “World of Hurt.” That document laid what Iosso calls “the theological commitments” that now find expression in the recommendations of the “Tax Justice” document. He said this now gives the PCUSA an opportunity to be “a prophetic witness” in Washington for “economic justice in our country.”
Now that the General Assembly has adopted the report, every advocacy arm of the PCUSA can be fully extended to advocate for the comprehensive public policy measures therein.
The PCUSA now seeks to “make the U.S. tax system fairer, calling it to be:”
• “more progressive, taxing those with greater wealth at higher proportions of their income, wealth, and inheritance;
• “more transparent, which includes both simplicity and accountability for all tax preferences and tax expenditures;
• “more solidarity-focused, which means reducing the use of tax expenditures, shelters and havens, and supporting more adequate international standards to reduce tax competition within and among nations;
• “more sustainable for current and future generations, which means avoiding unproductive financial and ecological indebtedness; and
• “more adequate, effectively addressing broader objectives of economic and social health than efficiency alone, such as meaningful employment, improved family life, and restored public trust. The tax system must be characterized by both efficiency in tax collection and revenue sufficient for the common good.”
Iosso, also insured on-going work for himself and the ACSWP through a recommendation at the end of the report which reads, ” the Advisory Committee on Social Witness Policy is directed to examine developments in clergy compensation, use of government funding by church mission programs and schools, and the rules governing Section 501(c)3 and 501 (c)4 organizations that may merit social witness on behalf of the church, to consult with the Advisory Committee on Litigation and ecumenical partners involved in church/state matters, and to report to the 222nd General Assembly (2016) as to whether further targeted study should be authorized.”
Yes, you read that right. ACSWP and the PCUSA are now undertaking a review of standards for all 501(c)3 and 501(c)4 corporations. Further progressive tax reform recommendations are expected at the 2016 General Assembly meeting in Portland, Ore.