A Senate tax reform bill passed Dec. 2, like its counterpart passed earlier by the House of Representatives, has “fundamental flaws,” according to a statement from the United States Conference of Catholic Bishops.  

The bill-reconciliation process, begun in Washington today, offers an opportunity for legislators to address the bills’ shortfalls, the bishops say.
“Congress must act now to fix the fundamental flaws found in both bills, and choose the policy approaches that help individuals and families struggling within our society,” said Bishop Frank J. Dewane of Venice, Florida, chairman of the U.S. Bishops’ Committee on Domestic Justice and Human Development, in a statement released Saturday.

Dewane added that the bishops are reviewing the Senate’s final version of tax reform legislation. They will provide analysis and comments on key improvements they think are necessary to include in the bill’s final version.

Two separate versions of the tax reform bill were passed by the House of Representatives and the Senate. The versions differ on the specifics of some deductions and credits, and these differences will need to be reconciled before the legislature approves a final bill.

The bishops cautioned that the reconciled version should prioritize poor and struggling families and individuals.  “For the sake of all people—but especially those we ought, in justice, to prioritize—Congress should advance a final tax reform bill only if it meets the key moral considerations outlined in our previous letters,”  Dewane stated.

One proposed provision intended to aid struggling families was Senator Marco Rubio’s (R-Fla.) amendment expanding child tax credit, which did not receive enough support in the Senate to pass.

While the Senate version of the bill raised the child tax credit from the $1,600 proposed by the House to $2,000 for qualifying families, Rubio’s proposal would have expanded the tax credit to payroll taxes, meaning that even the poorest families would benefit from the provision. The plan proposed offsetting the costs of the expanded credit by reducing the typical corporate tax rate from 35 percent to 22 percent, instead of 20 percent, as the bill called originally called for.

David Cloutier, Associate Professor of Moral Theology and Ethics at the Catholic University of America, told CNA that proposals like Rubio’s tax credit highlight the moral issues at play in the tax bill.  Tax relief for families is intended to recognize “that families do important work for the common good, and so government should help them do that work,” he said.

While a high corporate tax rate can have “detrimental effects on the common good because it drives businesses out of the United States,” Cloutier said, Catholics need to carefully consider the needs of those who are struggling the most when making judgements on how to serve the common good.

He said that, in his opinion, “there's a really strong argument” for extending a $2,000 credit to parents in the most pressing financial situations. “It can go a long way.”

Cloutier said that while “some kind of corporate tax cut,” might also benefit the common good, that “quibbling over 2 percent” is a much harder argument when the child tax credit, or similar proposals aimed at promoting the common good and helping those who are struggling most in society, hang in the balance.

In a Nov. 22 letter, the US bishops emphasized the principles of just tax reform. “A change in the tax code should not place families in a worse situation because they have welcomed the gift of life,” they said.

“Congress must take adequate time to analyze the complexities of these proposed reforms, and make certain that the nation does not further enshrine indifference toward the poor into law,” the bishops added.