Friday, May 30, 2008

The "Peace Tax"

I have already explained why I do not agree with the idea of war tax resistance. Many people who support the idea of war tax resistance also support an idea that has been called the "peace tax," and now I am led to explain why I don't agree with the "peace tax" either.

The form of the "peace tax" that is currently before Congress is H.R. 1921, the "Religious Freedom Peace Tax Fund Act." Skipping over findings and definitions, we find the guts of the act in section 4, which states in subsection a that:
The Secretary of the Treasury shall establish an account in the Treasury of the United States to be known as the 'Religious Freedom Peace Tax Fund', for the deposit of income, gift, and estate taxes paid by or on behalf of taxpayers who are designated conscientious objectors.

And in subsection b that:
Monies deposited in the Religious Freedom Peace Tax Fund shall be allocated annually to any appropriation not for a military purpose.

How could anyone object to that? Conscientious objectors get to pay their taxes into a special fund that is used only for non-military purposes, and so get to pay their taxes without contributing to wars. It's a win-win, right?

Actually, it's more like a nothing-nothing. It's nothing but a bookkeeping gimmick that divides tax receipts into two piles, and then allocates expenses between the two piles, but (and here's the important part) the expenses haven't changed. It is clear from the statutory language quoted above that the "Religious Peace Tax Fund" will only be spent on appropriations already approved by Congress and will not increase any non-military spending. The money that passes through the peace tax fund for non-military spending will simply be offset by an increase in the amounts for military spending from other tax funds. So military spending remains the same, and non-military spending remains the same. The path that the monies might take might change, and things might look different on paper, but the end of the path is the same and nothing has changed in reality.

The only way the proposed statute might have any real-world impact is if so many taxpayers directed money to the peace tax fund that there wasn't enough tax money to pay for military appropriations, but there are at least two reasons to believe that will never happen:

First, the number of taxpayers who are likely to direct their tax dollars to the peace tax fund, and the number of dollars directed to that fund, is never going to be large enough to impact the federal budget. According to the figures supplied by the IRS in the instructions to Form 1040 for 2007, in fiscal year 2006 military spending was 23% of the federal budget, while the personal income tax was 39% of the federal budget. The gift tax and estate tax (which are the other two taxes affected by HR 1921) are usually reported to be no more than 2% of the federal budget, so let's assume that 41% of the federal budget could be directed to the peace tax fund. Even if a majority of taxpayers directed that a majority of the income, gift, and estate taxes should go to the peace tax fund, there would still be enough of those taxes (half of 41%, or 20% of the budget), together with the corporate income tax (13% of the budget) to pay for military spending (23% of the budget). But if a majority of the taxpayers were that strongly opposed to military spending, that majority could simply elect a new Congress and actually reduce military spending instead of going through the charade of the "peace tax."

Second, even if enough taxpayers directed money into the peace tax fund to cause some kind of a spending problem for the military, there is nothing in the act that would prevent the Treasury from "borrowing" from the peace tax fund to pay for military spending, just as money is now "borrowed" from the Social Security Trust Fund to pay expenses unrelated to Social Security.

So the peace tax fund will never have any effect whatsoever on military spending, and does no good. And I believe that it will do us moral and spiritual harm.

It harms us because it dulls the pain of war. It would allow us to think that war is no longer our responsibility because we didn't vote for the politicians who sent us to war and because it's no longer "our" tax dollars paying for the war. But it is our responsibility. It is our government, and our responsibility, and we can't wash our hands (as Pontius Pilate did) and absolve ourselves through a bookkeeping gimmick.

If the Peace Testimony means anything, it means that we change our behavior, and not just our accounting methods.