In 1891, Pope Leo XIII wrote “Rerum Novarum,” a landmark encyclical on Catholic social justice and the economic problems of the new industrial age. Warning against then-flowering theories of socialism, he wrote that those problems “cannot be solved save by assuming as a principle that private ownership must be held sacred and inviolable.” He addressed the specific topic of taxes, describing “the moderation and fair imposing of public taxes” as one of the obligations of the modern state. “Excessive taxation,” on the other hand, he described as “unjust and cruel.” Leo argued that the state should encourage savings and ownership among workers, and that the reasonable hope of upward economic mobility would reduce the enormous class inequality that existed in his day and forestall disruptive forced mass emigrations. He also warned, however, that high taxes would “drain and exhaust” the potential benefits of prosperous, modern industrial nations.
So just how high should taxes be? How robust should our social safety nets be for the poor? And are decisions about that safety net better left to national governments, or to local ones?
