A Spiritual and Moral Case for Illinois’ Fair Tax Proposal

A Spiritual and Moral Case for Illinois’ Fair Tax Proposal

When Illinois voters head to the polls in November, they’ll vote on a proposal to amend the state’s constitution and create a graduated income tax system. Dubbed the Illinois Fair Tax, the amendment would sunset the state’s current flat tax structure in favor of a system that is more just and equitable for Illinois’ working class.

The usual suspects — secular and religious — have expressed opposition to the proposal. Fearmongers and conspiracy theorists warn the Fair Tax will create a retiree tax, a double tax and other fiscal boogeymen. More rational opponents of the amendment base their arguments on the belief that a flat tax structure is, by nature, the fairest form of taxation.

But is that really true?

Does a flat tax structure provide an income tax system that is truly fair to all state residents?

Or, in addition to the financial benefits for the state, are there spiritual and ethical reasons why a graduated or fair tax system offers a more just and morally responsible tax structure for Illinois and other states?

What is the Illinois Fair Tax Proposal?

Illinois is one of eight U.S. states with a flat-rate income tax system, and one of four states that requires a flat income tax in its constitution. The federal government and 33 states — including almost all of Illinois’ neighbor states — have graduated income tax systems.

Illinois’ current tax rate is 4.95% across the board. Under the Fair Tax proposal, the tax rate would remain unchanged for incomes between $100,000 and $250,000. Incomes less than $100,000 would be taxed at a slightly lower rate, while incomes higher than $250,000 would be taxed at a progressively higher rate, capped at 7.99% for annual incomes over $1 million.

Only incomes above $250,000 would see an increase in their state tax rate under the Fair Tax proposal. More than 90% of the state’s residents would receive a tax cut.

Proponents of the Fair Tax argue that a flat tax creates an unjust hardship for middle- and working-class families because it forces them to pay a larger share of their total income in taxes.

For example, someone earning $25,000 and paying a flat tax of 10% is forced to live on $22,500 a year, while someone earning $1 million under the same flat tax structure enjoys $900,000 in disposable income. 

It defies logic to argue that applying the same tax rate to both taxpayers (the one earning $10,000 and the one earning $1 million) even remotely resembles fair taxation.

The argument over the Illinois’ Fair Tax extends well beyond the Illinois state line. It directly speaks to the issue of income inequality and challenges us, as a nation, to confront the profound injustices associated with unfair distribution of wealth.

The Fair Tax debate and the moral value of money

We’ve been here before. In 1894, Congress launched a national debate over a proposal to enact the United States’ first peacetime income tax. Voices from every corner of society expressed opinions for and against a graduated tax structure, with many serving up the same arguments that have surfaced in the Illinois’ Fair Tax discussion.

Ironically, some of the most persuasive arguments for the graduated income tax in 1894 came from the religious sphere.

Religious proponents of the 1894 graduated tax based their support on the clear biblical mandate for the wealthy to care for the poor. They also cited the centuries-old Judeo-Christian tenet that those with higher incomes should pay more. 

But the most compelling religious case for a graduated income tax system — like the Illinois Fair Tax — involved something Joshua Cutler refers to as the decreasing moral value of money. Building on biblical sources (Matt. 18.12, Luke 15.4, Mark 12.41ff., Luke 16.19-31 and others) proponents argued that lower levels of earned income are inherently more valuable than higher levels of wealth, “which they viewed as unearned and morally suspect.”

The decreasing moral value of money concept gained support both inside and outside of the religious community. Notable proponents of the concept included Theodore Roosevelt and William Jennings Bryan.

But more importantly, the moral value of money concept offers useful insights into the current debate over Illinois’ Fair Tax and the larger issue of income inequality. The lesson?

The true value of money isn’t defined by numbers on a spreadsheet. At its essence, all money has moral value — and that value is defined by what it is used for.

For example, an individual earning $25,000 a year uses their entire income to pay for basic necessities like food and housing. On the other hand, an individual earning $250,000 or more a year enjoys a significant amount of disposable income that they use to either buy non-essential items or accumulate wealth.

In a flat tax system, low-wage earners are taxed on the funds they require for survival, while high-wage earners pay the same tax rate while living in extreme abundance. 

Modern-day opponents of the Fair Tax argue that this scenario is just capitalism at work — that in America, those who “work hard” enjoy the fruits of their endeavors.

It’s an ignorant argument, at best. Low wage-earners work just as long and hard as high wage-earner. In many cases, they work harder.

But more to the point, I would argue that there’s nothing “American” about a flat-tax structure at all. For more than a century, the United States has codified the decreasing moral value of money in its tax policy. In our graduated federal income tax system, those who earn more are expected to pay a higher tax rate.

From a spiritual and ethical perspective, the argument is even clearer. A flat tax system is more than just a bad idea. It’s anathema — an abomination to the historical Judeo-Christian values that inform our responsibility to the common good.

A final word for Protestants

Justice-minded Christians aren’t alone in supporting a graduated tax system. Both Judaism and Islam support the idea that wealthy taxpayers should pay a higher rate than the working class. In fact, the Islamic tenet of zakat supports taxing individuals on wealth — not income. The decreasing moral value of money strikes again. 

But as a Protestant clergyperson, I’m acutely aware of the arguments my conservative peers offer in support of a flat tax. And the practice of tithing sits at the top of that list.

A tithe is the donation of 10% of your income to your church. Protestant ministers — especially evangelicals — regularly hammer home the importance of tithing, mostly because they depend on it to fund their operations. Whether you make $25,000 a year or $250,000 a year, one out of every 10 dollars you earn goes to the church.

The tithe is essentially a religious flat tax. So, if it’s good enough for the church, religious conservatives argue, it’s good enough for government.

Religious opponents of the graduated tax system raised the same argument in 1894 and immediately met with resistance. It turns out the American people aren’t interested in operating the government like a local church.

But I know firsthand that Protestant churches — even so-called “tithing churches” — don’t practice what they preach. Although they preach the tithe, when the coffers run low, pastors appeal to wealthy congregants for additional donations. “If you’ve got more, give more” is a common mantra in these churches.

When push comes to shove, tithing churches practice a graduated “tax” system. So, when these individuals advocate for a flat tax system in the public sphere, it’s hypocrisy. Plain and simple.

A graduated donation system is the right move for churches because it’s fair and just. And it’s no less fair and just for the citizens of Illinois.

When Illinoisans head to the polls in November, they’re voting for more than a tax rate. In many ways, their votes will determine what we aspire to as a nation …

Will we be a nation that enables the accumulation of exorbitant wealth at the expense of the poor and working class?

Or will we remember the spiritual values at the heart of our faith traditions, and adopt a tax system rooted in fairness and economic justice?

I hope we do the right thing. And so should you.

The gig economy is scary. But is it better for your soul?

The gig economy is scary. But is it better for your soul?

The American economy is changing. Full-time, salaried positions are disappearing. They’re being replaced by one-off projects and short-term work contracts -— the kinds of jobs that make up the “gig economy.”

The idea of a gig economy can feel scary, especially for workers who like the security of a traditional nine-to-five desk job. But when I worked in the gig economy, I discovered that a freelance work model can also open the door to a more spiritually rewarding way of life.

How big is the gig economy?

The gig economy is big and it’s getting bigger every day. According to a recent Forbes report, there are currently about 53 million workers in the U.S. gig economy. By the year 2020, it’s estimated that 50 percent of the workforce will earn at least a portion of their income through freelancing.

While some of the people that are being added to the gig economy work low-paying seasonal jobs (like Amazon warehouse jobs during the holiday rush), others are year-round professionals with expertise in design, coding or (in my case) writing and content marketing.

Why is the gig economy growing?

There’s no denying that the gig economy offers a more cost-effective labor model for employers. In addition to reducing the cost of benefits, companies now have the flexibility to hire more workers during busy periods and fewer workers during slow ones.

But employers aren’t the only ones clamoring for freelance opportunities. More and more workers — including scores of  millennials — actually prefer contract work to traditional employment because it gives them the freedom to create lifestyles that accommodate their personal, professional and even spiritual needs.

3 ways the gig economy can be spiritually beneficial

Financial security is a concern for freelancers. But in some ways, the gig economy actually protects workers by providing income from multiple sources. If one employer disappears, you still have several other employers to fall back on.

But just as importantly, the freelance work model can provide several important spiritual benefits:

1. The gig economy forces you to engage in community.

At first glance, freelancing seems isolating. Many freelancers work from home and don’t have the kinds of daily interactions that exist in a traditional office setting. But successful freelancers know they can’t survive alone. They have to participate in communities (online and face-to-face) of like-minded freelancers to find gigs and professional support. These communities aren’t unlike spiritual communities — they require openness, selflessness and mutual respect to thrive.

2. Non-traditional work schedules are no problem.

Combining spiritual routines with traditional work routines is no easy feat. From morning prayer and meditation to volunteering and community interaction, spiritual activities are tough to squeeze in when you have to punch the clock for eight to 10 consecutive hours a day. The gig economy allows workers to create their own schedules and work routines. If you want to serve lunch at a soup kitchen or meditate from 10:00 to 10:30 each day, you can. It’s up to you whether you work in the morning, the afternoon or the evening. And if you want to take a few days off to travel or go on a retreat, it’s no problem, provided you can afford to miss the work or take your work with you.

3. You have to exercise faith and trust.

Traditional employment scenarios create a false sense of security. If you’ve worked at the same traditional job for several years, it’s easy to believe that it will always exist. But in reality, the company could downsize, get acquired or go out of business with little warning. Freelancers don’t suffer from those illusions. They have to constantly exercise faith and trust: faith that their next gig is just around the corner and trust that God is somehow looking out for them.

Non-traditional work routines aren’t for everyone. But as the gig economy grows, there will be even more opportunities to create your own work life — a life that’s big enough to accommodate the spiritual activities and commitments that matter to you.