The Compass: Official Newspaper of the Catholic Diocese of Green Bay, Wisconsin  Features
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Official Newspaper of the Catholic Diocese of Green Bay, Wisconsin
October 11, 2002 Issue

Stewardship: A Way of Life

Faithful Citizenship in 2002

Budget Shortfalls and Taxation

Stewardship: A Way of Life logo


Stewardship: A Way of Life is the diocesan thrust. It invites Catholics to acknowledge that all of life is a gift of God and to respond through prayer, service and sharing. This series will look at ways to do that.

Related articles ...

from the 10/04/2002 Compass:
Part four -- Health Care

from the 9/27/2002 Compass:
Part three -- Help for Families

from the 9/20/2002 Compass:
Part two -- Human Life and Dignity

from the 9/13/2002 Compass:
Part one -- Intro. and overview
Helping faithful Catholics decide

Fifth in a Series

By Wisconsin Catholic Conference


Budgets and taxes are almost always key issues in election campaigns. While tax laws can be complex and difficult for the average person to understand, tax policies represent a very basic judgment by citizens in a community as to what they value and how much they will ask of themselves to support those values.

Budgets, while they are laden with numbers and graphs, represent very human judgments about those needs and priorities to which the community commits its resources. This year, the issues of tax policy are linked to the "structural deficit" in Wisconsin's state budget. Together, they present a critical issue in the contests for Governor and the legislature.

Church on Government and Taxes

While no one likes to pay taxes, doing so is an obligation of citizenship. The Catechism affirms that paying taxes, like voting and defending one's country is "morally obligatory" (#2240).

Further, "it is the responsibility of all citizens, acting through their government, to assist and empower the poor, the disadvantaged, the handicapped, and the unemployed.... Government may levy the taxes necessary to meet these responsibilities and citizens have the moral obligation to pay those taxes" (Economic Justice for All, #123).

However, citizens must do more than pay taxes. They must be vigilant in assessing whether tax policies are just and equitable. Fundamental to whether taxation policies are just and equitable is the question of whether taxes are assessed according to one's ability to pay (Mother and Teacher #132).

But it does not follow that taxes are always the answer. The church also teaches that businesses have a right to "an institutional framework that does not penalize enterprises that act responsibly.... Managers and stockholders should not be torn between their responsibilities to their organizations and their responsibilities toward society as a whole (Economic Justice for All, #118).

Taxes in Wisconsin

Taxes in Wisconsin are generally higher than those of other states. This in part reflects a tradition sustained over the last century by leaders of both major political parties that Wisconsin should "go the extra mile" in providing services to citizens of even modest financial means.

Questions for Candidates

1. Do you support policies that base a citizen's tax burden on his or her ability to pay?

2. What factors will you consider in judging the fairness of Wisconsin's tax system?

3. What factors will you consider in determining whether taxes are too high or government is spending too much?

4. What programs will you seek to protect from budget cuts if government services must be reduced to help resolve the state's budget deficit?

5. Will you work to maintain the tax-exempt status of churches and not for profit groups that serve the needy?

Those who argue that taxes are too high express concern that they will inhibit economic development. They point to other states with lower taxes.

They point out that the income tax generates most of our state's revenue. They also cite data that indicates upper income tax payers pay a substantial part of the income taxes in Wisconsin. They go on to argue that tax cuts will not significantly change that distribution of tax burden.

Those who disagree with this analysis observe that focusing on state and local taxes fails to include user fees, other assessments on taxpayers, and federal support for state programs that rightly belong in any effort to measure the cost of government. When these other sources are added, they point out, Wisconsin's ranking falls from 3rd to 20th.

Wisconsin's also ranks 20th when one measures not taxes, but actual government expenditures per $1,000 of personal income. They argue that comparisons with other states will produce different results depending on the point of reference.

Others argue that Wisconsin's quality of life and tradition of a high level of services has benefited the state. They note that our state's tax burden is similar to that of Minnesota and that our tax rates did not prevent Minnesota and Wisconsin from growing in population at a faster rate than other midwestern states.

Budget Shortfall in General Fund

Currently, Wisconsin taxpayers provide the state government with just over $10 billion a year in general tax revenues. At the same time, the state is committed to spending just over $11 billion annually on programs funded by these same general taxes. Clearly, addressing this $1 billion "structural deficit" between what the state spends and what it generates in revenue must be a priority for anyone committed to the common good.

This promises to be difficult. Nearly 85% of general tax dollars are concentrated in a handful of important but costly programs. Cutting large amounts of money from any creates a new set of problems.

For example, nearly half of general tax revenue is returned to local governments to reduce their need to levy property taxes. Thus, cuts in spending on schools or shared revenues will increase pressure on local governments to raise property taxes. Cutting the corrections budget may lead to cuts in training programs that help prevent inmates from "re-offending" when they are released. Cuts in programs to the needy exacerbate the pain and a hardship of the most vulnerable.

Related to this issue is the impact of tax policy on tax-exempt property such as that owned by churches and religious groups. To the extent that government support for programs targeted to the needy retrenches, more demand may be placed on faith-based groups to make up the difference.

Moreover, some have suggested that tax-exempt entities pay fees or taxes for certain local services. Thus it may become important to remind people that not for profit entities contribute a great deal to the community because they are able to operate and provide necessary services without meeting a tax burden. Schools, hospitals, shelters, group homes, and other programs run by religious charities and others save Wisconsin taxpayers hundreds of millions of dollars annually.

-- Next: Corrections

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