At the current time, people are simultaneously complaining about record levels of taxation; a squeeze in welfare provision to people of working age and to children; problems with the provision of public services; and rising levels of debt. All these complaints have merit. Indeed, one of the problems is that we seem to demand incompatible policies from politicians: we should, perhaps, whatever our political sympathies, pause for a moment and empathise with politicians. Maybe we demand too much.
This situation is not unique to the UK. You can look across the channel – indeed, to almost every OECD country – and find a situation of seemingly intractable problems.
A time of crisis is a good time to go back to fundamentals. I will highlight two areas from Render unto Caesar which merit further reflection.
Debt
The UK, in common with most other developed countries, has a historically large peacetime national debt. This is a burden we impose on future generations. The Church has commented on inter-generational justice. For example, Pope Paul VI wrote in Populorum Progressio: “We are the heirs of earlier generations, and we reap benefits from the efforts of our contemporaries; we are under obligation to all men. Therefore we cannot disregard the welfare of those who will come after us…”.
The government spends the same on debt interest as it does on education. Whilst proper analysis of the question of government debt would lead to quite a few caveats, we should be aware that a decision by one generation to spend more than it is willing to pay in taxes imposes a burden on future generations which, in many circumstances, could be regarded as an injustice.
One reason why tax rates are high is because of the burden of debt interest which imposes a real burden on families today. Indeed, the question can be raised as to whether this indebtedness injures the common good and human dignity. This is especially so if the seemingly intractable fiscal problems lead to social conflict and, perhaps, the misattribution of blame to vulnerable groups such as migrants.
Related to this problem of government debt are the promises made to future generations of older people in terms of future pensions and healthcare provision. The projections of the government’s Office for Budget Responsibility suggest that our national debt will explode to around 350% of national income on current policies because of those obligations – and that is on pretty optimistic assumptions. No advanced provision was made by way of capital funding when these promises were made. It was just assumed that the number of younger people would always be sufficient to support the system. It was never realised that fertility rates might plummet, and people would live longer. These plummeting fertility rates are, in and of themselves, something which the Church might be concerned about.
There is no shortage of examples where the common life of society and social peace have totally broken down as a result of high levels of government indebtedness. I hope that we are not going to relive that in the West, but we might.
Catholics should care about government debt of all forms – there is a moral aspect to decisions by governments to borrow rather than meet current needs out of current spending. The problem is urgent and important.
Taxation and the family
Catholic social teaching makes clear that the fundamental building block of society is the family. When a couple marry, they are no longer two persons, they become one person. Render unto Caesar examined how our tax system should be designed to ensure that families can flourish. In the UK, unlike in countries such as France and Germany, the concept of the family is largely ignored in the tax system. Our tax system is based on individual, and not household, income so that families where one adult undertakes caring responsibilities rather than paid work are strongly discriminated against.
The way in which the tax and benefits systems interact penalises marriage and family formation – especially for people on low incomes. The figures produced by Marriage Care’s and highlighted in their synod submission are really quite extraordinary. For example, fewer than a quarter of low earners marry. And it is at low levels of earnings that the tax and welfare system are least conducive to marriage and family life. Family breakdown is a reality and a tragedy, and I am not suggesting that this should be ignored or that we should be unsympathetic, but the Church’s teaching on the nature of marriage and the family would suggest that our tax system is fundamentally flawed and should be changed to be more conducive to marriage and family life.
Concluding remarks
As it happens, the Church has never said much about the overall level of taxation in her official documents. This is surely correct because there is a whole variety of ways in which the common good and human dignity can be promoted through political structures. In the past, however, the Church (from Jesus, through St John Chrysostom to Pope Leo XIII), did give out pretty stark warnings that riches can be ruinous to the soul. We must use our riches to promote the common good whether through business, philanthropy, social enterprise or otherwise). And we should remember that our obligations to others do not end with taxation. This is Rerum novarum, for example:
Therefore, those whom fortune favors are warned that riches do not bring freedom from sorrow and are of no avail for eternal happiness, but rather are obstacles; that the rich should tremble at the threatenings of Jesus Christ…and that a most strict account must be given to the Supreme Judge for all we possess…[W]hen what necessity demands has been supplied…it becomes a duty to give to the indigent out of what remains over…It is a duty, not of justice (save in extreme cases), but of Christian charity – a duty not enforced by human law.
In the modern age, people do not like being lectured or being told that their soul is in danger, but it is better to find out now than later! Our duties to the poor do not end when we have paid our tax bill. The state should leave room for philanthropy, and we should have a tax system which encourages philanthropy. This is related to the point about family taxation because the state should tax us on our income after we have met other obligations – these include obligations to our family as well as obligations we choose to meet through philanthropy. As it happens, this is one of the few aspects of the tax system (from which the Church, of course, benefits) which is clearly in accord with Catholic social teaching.
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