One of my favorite persons in the Bible is Joseph, the eleventh son of Jacob. My readers will recall that he was sold into slavery by his jealous brothers, and yet rose to become the most powerful man in Egypt after the Pharaoh. He teaches us many important spiritual lessons, such as the importance of forgiveness, patience in adversity, and faithfulness to God even when falsely accused. However, he might also have a powerful lesson for our nation at this time as Joseph’s political shrewdness is often neglected today in our pulpits. Prior to the great famine that plagued Egypt, Joseph arranged to set aside food for the Egyptian people. During the latter part of the great famine, the Egyptians had used up their money to buy grain. There was no more money, and their livestock had dwindled to nothing. Brilliantly, Joseph had all the inhabitants of Egypt (less the priestly class) sell their properties to Pharaoh for seed and food, which became the property of Pharaoh (think of it as government property). Then after this, Joseph added that one fifth of the produce should go to Pharaoh as well. (The fact that Joseph only “taxed” 20 percent of production is interesting because over the years, federal revenue has remained relatively steady between 15 and 20 percent of GDP, though it has increased to 25 percent under President Obama. Is there a biblical lesson for us here as well?) In any event, the Egyptians exchanged their property for food, and within a short time, the Hebrews were slaves, and I suspect the Egyptians were not much better off.
But Joseph offers some important insight for the negotiations regarding the so-called “fiscal cliff.” Sure, the so-called “negotiations” are moving at a glacial pace. But President Obama has sought to increase federal income taxes on the top two percent of income earners (singles making more than $200,000, and couples earning more than $250,000). I am unsure whether this level of income qualifies people as being millionaires and billionaires, but we must give our President the benefit of the doubt. After all, he did win the November election. Of course, the higher income tax rates are expected to raise an estimated $80 billion or so per year, if that much. Since the President considers the wealthy to be under-taxed in the United States, then there is one possible biblically-based solution that has been tried in many foreign countries, including France. The President might wish to propose and articulate for a national wealth tax (which I will call the “Joseph Tax”) to generate large amounts of revenue so that more individuals might enjoy generous government largesse (incidentally, participation in the Supplemental Nutrition Assistance Program, or food stamps, reached another high in September, according to new data by the Department of Agriculture. Released late last week, 47,710,324 people were enrolled in the program in September, an increase of 607,559 from the 47,102,765 enrolled in August, and the number of households enrolled in the program also increased from 22,684,463 in August to 22,973,698 in September, an increase of 289,235.) A Joseph Tax would provide the needed governmental revenues so that our nation can help the elderly, the disadvantaged and poor enjoy generous social welfare programs comparable to those in Europe. Surely no serious Christian believer can ever be opposed to helping those less fortunate among us.
The Joseph Tax would be based on the aggregate value of all household assets, such as housing and other real estate investments, furniture, cash, bank deposits, investments, pension plans, art collections, yachts, unincorporated businesses, and any personal trusts. Thus, the Joseph Tax would focus on the wealthy on their accumulated level of purchasing power. This would be, of course, in addition to federal and state income taxes. Such a plan should not surprise us. After all, aren’t real estate taxes based upon the value of the property, and the property values are independent of income? The higher the value of the property asset, the higher the taxes paid. And in most states, commercial property is taxed at a higher tax rate than a personal residence as a different class of property. (Note again, Joseph’s political wisdom: the religious institutions of his day were not taxed, just as our society does not tax churches and other religious institutions, and their property.)
How would the Joseph Tax work? Let’s suppose that we establish a five percent Joseph Tax for all net assets in excess of $100,000. Thus, we would add up the value of one’s home, present value of all pension or 401k plans, cash in bank, mutual funds, investments, and any other investments or property, less the total amount of debt. This would determine the net asset value for a person or family unit at the end of the year. Then, in addition to income taxes, say that a five percent tax would be levied on the net assets. As an example, suppose John and Larry, a married couple from Washington, D.C., have $500,000 in net assets, then a $20,000 Joseph Tax would be paid (computed as follows: ($500,000 in net assets less $100,000 exclusion) x 5% = $20,000)). Then the Joseph Tax could also be at an incrementally higher rate for high net-worth individuals. As an example, suppose that a hypothetical couple named Mitt and Ann have $150,000,000 in net assets, their Joseph Tax could be 20 percent. Thus, Mitt and Ann would write an annual check to the Internal Revenue Service of $29,980,000 ($150,000,000 in net assets less $100,000 exclusion = $149,900,000) x 20% = $29,980,000). This would ensure that this hypothetical couple would pay their fair share even if their incomes were taxed in a more favorable manner. Of course, capital gains and dividend tax rates are scheduled to increase dramatically in the coming weeks.
Such a system would be beneficial to our nation in that it would raise large amounts of revenues for the federal government to provide for the poor, the disadvantaged, and the elderly. We would not even have a federal government budget deficit (at least for a few years). And even if persons were to seek selfishly to reduce their own Joseph Tax, they would then need to spend the money, which creates new jobs, including those for restaurant and hotel workers, auto dealers, appraisers, IRS tax specialists, accountants and lawyers. It would also increase bank loans and bank profits (as persons seek to reduce their net assets), which would be great for Wall Street bankers. Moreover, and Joseph would have approved of this part, the Joseph Tax would be more fair than an income tax, as it would be, in effect, a user fee on private property rights focused on those with an ability to pay. Wealthy farmers, estimated to own a total of 526,421 farms, or about 25 percent of all farms in the United States, could simply deed 20 percent of their land yearly to the federal government, just as in Joseph’s time, to pay the Joseph Tax. Importantly, the Joseph Tax would encourage the productive use of assets (as in “use it or lose it”). So, no more idle art collections, rarely used Italian or Corsican villas, yachts, and jets for the wealthy.
Of course, the ultimate objective would be to help to redistribute wealth from the wealthy who do not need it to those who want student loans, and other governmentally-provided social services, such as cell phones. It could even enable the food stamp program to expand to include hot food served at restaurants. After all, why shouldn’t the poor be entitled to enjoy a nice steak dinner, with a bottle of Barolo or Amarone? Now, some may observe that there could be a small constitutional problem in the United States with this thoughtful and biblical approach to solving our nation’s “fiscal cliff.” The Constitution prohibits any “direct tax” on personal holdings unless the revenue collected is apportioned among the states on the basis of their population (See, Fernandez v. Wiener, 326 U.S. 340, 362 (1945), in which the Supreme Court stated that a direct tax is a tax “which falls upon the owner merely because he is owner, regardless of the use or disposition of the property.”) But passing constitutional muster in today’s Chief Justice Roberts’ Supreme Court should not be a major obstacle, especially since the Supreme Court’s holding in the Fernandez case is such ancient history. After all, the pesky Constitution seems to be only a suggestion among some of our nation’s top jurists. We cannot merely rely upon an ancient document to preclude our nation from serving the poor, the disadvantaged, and the elderly, while the wealthy evade their societal obligation by failing to pay their fair share as President Obama reminds us so clearly and often. After all, did not Jesus remind us to give to Caesar’s what is Caesar’s? And should not the government itself determine what is Caesar’s? Yes, the ancient Egyptians exchanged their property for government food, and in turn, became slaves. I am sure that Benjamin Franklin remembered this factoid of Bible history when he wrote: “Those who would give up essential liberty to purchase a little temporary safety, deserve neither liberty nor safety.” Indeed. That wily and astute political operator Joseph would have been proud.