Christian Tax Policy

Here’s the prescription:

  1. Progressive corporate tax to punish monopolies and foster small business formation.
  2. Value-added tax to soften the transition to automation of work.

What follows motivates the prescription.


As a Christian, it is hard for me to focus on money. It’s not that I don’t understand economic and financial theory, it’s just that money isn’t important to the ends that I pursue. I seek, through this blog and other work, to heal the confusion that poisons our relationship with the Most High. That’s a difficult problem, demanding the fullest commitment of my energies.

As I told my sons in their formative years: “Money is a way of storing power. For those that commit all of their power to solving difficult problems, there is nothing left to store.”

Jesus warned us that “You cannot serve two masters…No man can love both God and money.” Therefore, in seeking to transform our relationship with the Most High, we do need to understand money, because it is a principle source of resistance to the rule of love. People that desire money desire it because the are selfish, and as I have explained out at Love Returns, selfishness is the opposite of love.

We have two looming disasters in our economy. The first is the destruction of the middle class by the richest members of our society, people such as Rupert Murdock and Peter Thiel that have no compunction about using their wealth to fund propaganda machines that demonize government. The second is the loss of blue-collar jobs, accessible to those with high-school diplomas, to automation.

The exploitation of resources has always been a foundational principle of American politics. Elected our first president, George Washington complained that he spent all of his time as a promoter of business opportunities in the nation’s undeveloped lands. That practice is enshrined in most of our state constitutions, where the first priority in land use policy is economic. At the federal level, conservation policy has limited the most brutal forms of resource exploitation.

Contract law provides a legal framework for exploitation of the last great resource: human potential. In the “Land of the Free,” the ability to enter into economic contracts is one of our most honored acts, though paradoxically it places us under the heavy hand of law enforcement when we have disputes. It is this that is decried in Revelation 13:18:

so that no one could buy or sell unless he had the mark – the name of the beast or the number of its name.

Murdock, Thiel, and their ilk know that they have attained wealth only through exploitation of investments made by others – investments accrued over millions of man years of public education and government-funded research, and trillions of dollars of infrastructure investment. Their attempts to limit their obligation to “pay it forward” are driven by greed.

Not being limited any longer by prudence or compassion, this class seeks economic dominance in their various industries. Concentration of industrial power is visible in all industries. It was decried as monopoly in the late 1800’s, and defense against it was established through the Sherman Act, the Clayton Act and the Federal Trade Commission. Those tools have become blunted in the last twenty years because trade has become multinational. Facebook and Google, the information service monopolies of our era, are not disciplined because they are American monopolists. The European Commission sees them as adversaries, of course, and Google, for one, is facing some large fines for monopoly conduct. But it’s not limited to high-tech: concentration is growing in telecommunications and financial services.

Fortunately, monopoly has one clear indicator: huge profits. In the personal tax code, we recognize that those making the most money also benefit most from public services, and tax them accordingly. We should do the same in corporate taxation. While large corporations use their market position to reap huge profits, it is small businesses that generate new opportunities and new jobs. We should reward them for their efforts. We need a progressive corporate tax code.

The middle class is not only being squeezed by monopoly pricing, it is being gutted by automation. Jobs are disappearing, and fast. On the immediate horizon is the loss of almost two million blue-collar jobs as shipping moves to self-driving trucks. But we see this throughout America: even as wages rise overseas, making local production competitive again, the factories that we are building use a fraction of the employees needed by their predecessors. All the material manipulation and most of the assembly is done by machines.

The factor that drives this investment is payroll reduction. A robot is a fixed-cost investment, does not ask for higher wages, and is subsidized by capital equipment tax write-offs. They are also far more precise in their work, yielding higher-quality goods that are preferred by consumers.

The replacement of taxed payroll expenses with tax-free capital equipment investment also hobbles government by restricting tax revenues. Clearly, our workforce needs new skills. Our youth are provided those skills for free by pubic education, but those skills no longer guarantee lifetime employment. People need to learn throughout their lives.

Employers, of course, don’t want to pay for that investment, because it creates opportunities for their best people to take positions elsewhere. So – as predicted by Adam Smith in The Wealth of Nations – the tendency of corporations is to exploit workers until they can be replaced by machinery, and then to cast them aside.

Smith defined the theory of capitalism, and his prescription was simple: governments must tax businesses to provide workers opportunities to retrain when they are replaced by equipment. Governments starved of tax revenues by automation can’t provide that service, which means that America’s human capital is now going to waste.

The solution comes to us from policy-makers confronting outsourcing of jobs: in Europe, companies were caught out selling products “Made in England” that were assembled from parts produced overseas in low-wage markets. To limit that incentive, a “value-added tax” was created. VAT charges a tax on companies reflecting the increase in their wealth as materials move through a system to create a finished product.

While this didn’t prevent jobs from going overseas, it did ensure that government revenues were maintained to support retraining and job placement services. If applied to goods shipped into our lucrative consumer market, it is also a reasonable way to limit the social costs of overseas production by countries that choose to exploit both labor and the environment. If a car made in South Korea for $2000 and sold in South Korea for $6000 enters the American market to be sold for $20,000, well the South Korean manufacturer should pay a VAT when that product is unloaded at Los Angeles.

Identity Crisis

So I’ve been refreshing my Java skills, working through Deitel and Deitel’s “Java Standard Edition 8” training material. The first seven chapters have been pretty easy going, but I’ve been doing the usual – blowing out the simple coding examples so that they actually model the real world.

For example, when simulating shuffling a deck of cards, the sample code simply takes the entire deck from top to bottom, and swaps the next card with a random one below it. Of course this violates the way that a real shuffle works. In a real shuffle, the cards at the top of the two stacks of the cut end up closer to the top. So I wrote a random shuffle algorithm that simulates the cut, and merges the two by taking cards randomly from each stack until one is exhausted.

The next assignment is to capture some statistics on a set of test scores. It’s a pretty simply problem: minimum and maximum values and the average. But you know where that goes: at the end of the term, the scores for all the assignments have to be rolled up into some final grade. This seemed like an interesting problem – coming up with some general mechanism for aggregating scores into a final grade.

We all know how terms start: the teacher hands out a syllabus with a weighting for each element of the course work: homework, quizzes, mid-terms, papers and finals are typical elements. Each element is given an expected weighting to the final grade.

Of course, it never works out that way. Some midterms are harder than others, but each should contribute the same weight to the final grade. This is sometimes accomplished by weighting the test scores so that the averages are the same. And what if the students move through the material faster or slower than in prior years? Might they not complete more or less assignments than expected?

So this simple little fifty-line program became a ten module monster. I can’t entirely blame my son Gregory for the damage done by my interview with him on grading policies at the JC he’s attending. But he did bring up a really interesting point: nobody but the professor knows the actual assignment scores. She produces a final letter grade, and that’s all that the records office knows.

We were trying to decide how to model this, and came up with the idea of the professor having a grade book with a private set of identifiers that link back to the student records held by the registrar. After each assignment is graded, the instructor looks up the grade book ID for the student, and adds the grade to the book against that ID. At the end of the term, the professor combines the scores to produce a class curve, and assigns a letter grade for each interval in the distribution. In the end, then, no student knows how close they were to making the cut on the next letter grade, so nobody knows whether or not they have a right to appeal the final grade.

In my code model, therefore, I have two kinds of people: students and instructors. Now we normally identify people by their names – every time you fill out a form, that information goes on it. But sometimes names change.

In the grade book, of course, we also want identities to remain anonymous. We need mechanisms to make sure that IDs are difficult to trace back to the person being described. The NSA did this with records subpoenaed from the phone carriers – though nobody was convinced that the NSA wasn’t bypassing the restrictions that were supposed to prevent names from being linked to the phone calls until a warrant was obtained from a court. In the case of my simple gradebook model, it’s accomplished by making the class roster private to the “Instructor” class.

This all got me to thinking about how slippery “identity” is as a concept. It can be anything from the random number chose by the instructor to a birth certificate identifier to a social security number to a residence. All of these things provide some definite information about a person, information that can be used to build a picture of their life. Some of it is persistent: the birth certificate number. Other identities may change: the social convention is that a woman changes her name when she marries. And in today’s mobile world, we all change residences frequently. A surprising change in my lifetime has been that my phone number doesn’t change when I change residence, and the phone number is a private number, where once it was shared with seven people.

So as I was modelling the grade book, I found myself creating an “Instructor” class and a “Student” class, and adding a surname and given name to both. I hate it when this happens, and in the past I would have created a “Person” that would capture that information, and make “Student” and “Instructor” sub-classes of Person. But that always fails, of course, as what happens when an instructor wants to sign up for an adult education class?

And so I hit upon this: what if we thought of all of these pieces of identifying information as various forms of an “Identity”? Then the instructor and student records each link to the identity which could be a “Personal Name.” That association of “Personal Name” with “Instructor” or “Student” reflects a temporary role for the person represented by the identity. That role may be temporary, which means that we need to keep a start and end date for each role. And the role itself may be identifying information – certainly a student ID is valid to get discount passes at the theater, for example.

The subtlety is that addresses and old phone numbers are reassigned to other people every now and then. The latter was a frequent hassle for people that got the phone number last held by a defunct pizza take-out. And it’s even worse for the family living right in the middle of America, which is the default address for every internet server that can’t be traced to a definite location. The unfortunate household gets all kinds of writs for fraud committed by anonymous computer hackers.

But I really wish that I had a tool that had allowed me to maintain a database with all of this information in it. I don’t think that I can reconstruct my personal history at this point. As it is, what I have in my personal records is my current identity: my credit card numbers (which BofA fraud detection keeps on replacing), my current address and phone number, my current place of employment. That is all that the computer knows how to keep.

With the upshot that I know far less about myself than the credit agencies do.

Faith and Intellect

The atheist’s complaint against religion is frequently rooted in charges of anti-intellectualism. This is evident in Nicholas Baker’s article in this quarter’s Skeptic (Volk. 20 No. 4), Christianity’s Negative Impact on Modern American Education.

I must admit to being befuddled by these charges. Upon encountering atheists decrying intellectual incoherence in the faithful, I often invite the critic to come out and respond to the writings under the New Physics page of this blog. I have also offered the material to scientists through various forums. So far, I have received no response.

A colleague at work invited me down to the atheist Sunday Service in Santa Monica. In the event, a couple of sarcastic remarks regarding faith rankled, but for the most part I found a group of well-meaning people that seemed to have no interest in their spirituality. I confirmed this with my friend later, saying that I didn’t think that I would fit in to the community. When I offered that my experience was that my very presence forced people to confront their spirituality, he confirmed my decision.

It is the anti-spirituality of atheism that concerns me most. Until it is recognized, I am afraid that it is going to be impossible to reconcile the two communities.

An anti-spiritual emphasis is not entirely unique to atheism – I had a Kabbalist tell me that men were not to enter spiritual experience until they were forty. The violence outbursts of nationalism that rocked the world in the 20th century may be symptomatic: where once European politics was dominated by the egos of kings, public education may have facilitated the formation of gestalts that were driven by the masculine urge to power. Jung’s work on the collective unconscious may have been an attempt to understand the dynamics, and he writes in his biography of looking up at the mountains before World War II and seeing a tide of blood pouring over them. I sometimes suspect that, in the aftermath of the war, psychologists settled on denial of spiritual experience as a necessary practice of quarantine to prevent future epidemics. I have encountered some that say they diagnose schizophrenia only if the voices create fear in the patient. And when I sought counseling to deal with family-related stress, once the therapist determined that I was stable, she began asking me questions about reincarnation and process theology, with a focus on understanding why so many of us are immature spirits.

Unfortunately, any policy of denial creates a context of conspiracy that feeds a revolutionary counter-reaction. I believe that this is probably the basis of the anti-intellectualism that Mr. Baker confronts.

The illustration for Mr. Baker’s article shows Jesus whispering a test answer into the ear of a struggling student. This is a point made explicitly in the article: “When it comes to academic achievement, helping a student solve a math problem, using math and the student’s actual brain, displays better family values than does teaching the student to distrust intellect while pleading for an answer to fall from the sky.”

Mr. Baker’s attitude is rooted in the conflation of the brain and mind. While I did not force my children to read the Bible, I struggled against this prejudice with making them aware of the nature of intellect. As I perceive the operation of my mind, the brain is not a logic circuit, it is an interface that ideas use to become invested in the world, and an anchor that they use to create new forms of association. Ideas are spiritual constructs. As possessors of brains, we are their dance partners.

The most painful part of parenting my children through the prejudice of scientific materialism was when my younger son, struggling with his studies, attempted to engage me in discussion only to have his older brother come downstairs and tell him how wrong he was. For years I had attempted to open Greg’s mind to the world of ideas that Kevin had gained access to as an infant. Before Kevin’s intervention, I had felt the door finally opening, and it broke my heart to have him slam it shut. I dealt with the matter pretty harshly, telling him “If you don’t stop abusing your brother, I am not putting a single cent into your college education.” In later conversation, I told Kevin that “ideas are strongest when they are shared.”

This is known among mature scientists. Edward Teller’s office at LLNL had pictures of all the great scientists of his era, and I could feel their personalities reaching out through them. In another incident, I saw a divorced father at dinner with his son, the beautiful mother, and the wealthy man she had married. The son had asked a technical question, which the father answered after a pause. The child challenged him “How do you know that?” To which the father could only answer “I was informed.”

Personally, I had the experience in high school AP Biology of working in a classroom of collaborative students. During the AP exam, I became stuck on a couple of questions and found the answers arriving during final review. The teacher reported that to her surprise – given the brilliance of students in prior years – we had achieved the highest average score on the test in all her years of teaching. And in discussing morality at work, I have shared that when I reach a road block, I frequently open my mind and  an answer comes to me. At times that has been as explicit as having a person’s voice come into my head and say “Do it this way…”

Baker does not articulate this experience, and given his reaction to Christian values, I think that he may not be conscious of the operation of his own mind. If he was, he would understand the preconditions for sustaining such exchanges. It requires surrender of the ego (something that nature often forces upon scientists) and a genuine concern for others. This is the teaching we find in the Bible. In denigrating the value of the book’s moral teaching, Baker and his colleagues are undermining the attempts by Christian parents to open the door to the gestalt of civilized ideas known to the faithful as “The Holy Spirit.” That is no small matter.

Until they arrive at an alternative technology, Baker and others might do well to be more gentle with their public pronouncements. The emotion they attach to their crusade is going to make it extremely difficult for them to reconcile themselves to Christ when those investigations force them to confront his existence.