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Taxation and the Bible

Sep 23, 2018

What does the Bible have to say about the issue of taxation? Should we pay taxes? If so, what rate of taxation should we pay? What about indirect taxation? Often the answers we give to these sorts of questions will depend more on our political viewpoint than what Scripture has to say.

That is, a libertarian for example will likely make this claim: “Taxation is theft”. We hear this all the time. But is it biblical? Is there a place for government taxation? And if so, what sort of tax would it look like? In this article I wish to address some of these issues.

First, the Old Testament speaks much of the tithe. It was the “tax” God established for his people at the time. A few things must be said about this however. First, we must notice that the tithe was never actually a monetary payment, but a ten per cent payment of crops or livestock, etc.

Consider just a few passages. Leviticus 27:30-32 says this: “Every tithe of the land, whether of the seed of the land or of the fruit of the trees, is the Lord’s; it is holy to the Lord. If a man wishes to redeem some of his tithe, he shall add a fifth to it. And every tithe of herds and flocks, every tenth animal of all that pass under the herdsman’s staff, shall be holy to the Lord.

We find much the same in passages such as Deuteronomy 14:22-28. It was a tithe of flocks and fields, produce and livestock. Today in the West we are overwhelmingly urban dwellers, with very few farmers. So if we wanted to apply strict OT principles today, we would be hard-pressed to do so.

And this was exactly ten per cent – no more, no less. So we find no “progressive tax rates” here, but a “flat rate” – applicable to all. As to the question of whether the tithe is a New Testament requirement, see my earlier article on this: billmuehlenberg.com/2017/01/28/should-christians-tithe/

There was however one monetary tax which all Israelites had to pay: the census tax. In Exodus 30:11-16 we read all about this. Everyone “who is numbered in the census, from twenty years old and upward” had to pay half a shekel (vv. 13-14). And notice that it applied equally: “The rich shall not give more, and the poor shall not give less, than the half shekel” (v. 15). Later this seems to have been changed to a third of a shekel (Nehemiah 10:32).

But let me turn to the New Testament. One of the most famous stories about taxation is found in all three Synoptic Gospels: the story of paying taxes to Caesar. It is found in Matthew 22:15–22; Mark 12:13-17; and Luke 20:19-26. Since they are all fairly similar, let me just offer Mark’s version:

And they sent to him some of the Pharisees and some of the Herodians, to trap him in his talk. And they came and said to him, “Teacher, we know that you are true and do not care about anyone’s opinion. For you are not swayed by appearances, but truly teach the way of God. Is it lawful to pay taxes to Caesar, or not? Should we pay them, or should we not?” But, knowing their hypocrisy, he said to them, “Why put me to the test? Bring me a denarius and let me look at it.” And they brought one. And he said to them, “Whose likeness and inscription is this?” They said to him, “Caesar’s.” Jesus said to them, “Render to Caesar the things that are Caesar’s, and to God the things that are God’s.” And they marveled at him.

Jesus does not deny the right of the state to tax. And Paul also argues for the legitimacy of government taxation. In Romans 13:6–7 we read: “For because of this you also pay taxes, for the authorities are ministers of God, attending to this very thing. Pay to all what is owed to them: taxes to whom taxes are owed, revenue to whom revenue is owed, respect to whom respect is owed, honor to whom honor is owed.”

The story of the temple tax found in Matthew 17:24-27 also speaks of Jesus’ willingness to pay taxes:

When they came to Capernaum, the collectors of the two-drachma tax went up to Peter and said, “Does your teacher not pay the tax?” He said, “Yes.” And when he came into the house, Jesus spoke to him first, saying, “What do you think, Simon? From whom do kings of the earth take toll or tax? From their sons or from others?” And when he said, “From others,” Jesus said to him, “Then the sons are free. However, not to give offense to them, go to the sea and cast a hook and take the first fish that comes up, and when you open its mouth you will find a shekel. Take that and give it to them for me and for yourself.”

Of course to establish the right of state taxation does not answer other important questions, such as what is the right tax rate, if any? Some have argued that the ten per cent principle found in the OT may be a good standard for governments today to hold to.

Lower rates of taxation seem both biblically based and economically sensible. As to the former, recall what John said to those who asked him about taxation in Luke 3:12-1: “Tax collectors also came to be baptized and said to him, ‘Teacher, what shall we do?’ And he said to them, ‘Collect no more than you are authorized to do’.”

It seems seeking to collect more than is due can move us into the realm of “taxation is theft”. But notice two more aspects of this: an exact percentage is not given by John – nor anyone else in the NT – and the tax collector is not told that he must renounce his profession if he wants to be a disciple of Christ. Indeed, a noted disciple was Matthew, the tax collector (Matthew 9:9-13). That same passage informs us that Jesus did not mind eating with tax collectors as well.

I mentioned that from an economic point of view, a case can be made for low tax rates. With hundreds of books on political economy sitting on my shelves, I could quote here from dozens of authors. But let me narrow things down drastically, and offer the insights of just one well-informed Christian theologian.

Wayne Grudem in 2010 penned his important volume, Politics According to the Bible. See my review of this very helpful volume here: billmuehlenberg.com/2010/11/01/a-review-of-politics-according-to-the-bible-by-wayne-grudem/

In his chapter on economics, he spends 25 pages on taxation (pp. 285-309). Those pages are well worth a careful read. In it he deals with quite a range of issues concerning taxation. On the question of how high or low taxation should be, he begins his discussion as follows:

“Taxes are a powerful tool that can either help or hinder economic growth. They also have enormous effect on individual lives, and tax rates can either significantly hinder or significantly help individual liberty within a nation.” Consider the notion of individual liberty:

If my taxes increase by $100, then I have $100 less to buy some new shoes or clothing, to take my wife to a movie or restaurant, to give to some missions program at my church, to buy books for additional research, to send as a gift to my children, or to do any of a thousand other things. My freedom to decide what to do with that $100 has been taken from me when the government collects another $100 in tax. So it is every time that taxes increase: A little more freedom—another small portion of everyone’s life—has been taken away by the government.

And he offers a lengthy economic argument to show that “when a government lowers its tax rates, it actually ends up collecting more money!” He further makes the case for a low, flat rate of taxation, and then says:

I agree that some provision should be made so that people who earn a very small amount of income will pay only a small amount of tax. Even in the law code of ancient Israel, where a sacrifice of a lamb was required after the birth of a child (see Lev. 12:6), there was a provision for people who could not afford this: “And if she cannot afford a lamb, then she shall take two turtledoves or two pigeons, one for a burnt offering and the other for a sin offering” (Lev. 12:8).

He offers for summary statements on all this:

As we have indicated in previous sections, the biblical teachings (a) that property belongs to individuals, not to society and not to the government, (b) that governments should not take excessive amounts of money for itself, (c) that government should seek to bring economic benefit and economic growth to a society, and (d) that government should protect and safeguard individual liberty, all argue in favour of lower tax rates than we now have.

Of course much more needs to be said about biblical economics in general and principles of taxation in particular, but the above should demonstrate at least a few truths: God has ordained the state and taxation. To argue for no taxation is to be unbiblical. To argue for excessively high taxation may also be unbiblical.

Let me conclude with some comments by N. T. Wright on the Romans 13 passage:

The civic authorities, great and small, are there because the one true God wants his world to be ordered, not chaotic. This does not validate particular actions of particular governments. It is merely to say that some government is always necessary, in a world where evil flourishes when unchecked…

Clearly those who believed that Jesus was the one true Lord of the world might well use that belief to rationalize withholding taxes which many of their pagan contemporaries, too, thought were unjust. Paul stands out against that. Christians were likely to get into quite enough trouble for far more serious things, as he knew well from his own experience; but they should be good citizens as far as they can.

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11 Responses to Taxation and the Bible

  • Are there really people who really believe taxation is theft? The answer must be yes!
    So these must be as challenged as our other snowflake friends.

    There are very little taxes in many 3rd world countries and the evidence is there for all to see with bad roads, intermittent electricity, and challenged water and sewerage systems. We may add to that by including poor security and inadequate justice systems. A few of these can be handled on a village basis, but it is very difficult for individual families. Things like education and healthcare and aged care need a certain amount of community involvement especially with tertiary education and special healthcare.

    Before John Howard was PM, I asked him a question about the possibility of tax recognition for those families that took responsibility for the family education and aged care. His big “knock me down” comment was that the government spends seven times as much to provide a service than the cost to the family, that can do the same thing.

    Besides the waste in government programs some countries also have rampant corruption.
    So the comment about theft has some merit, but taxation to run unified community programs is essential if we want a first world living experience.

    There is also the issue of what is God’s and what is Caesar’s. It seems to me that often we want the government to do it all. A recent example is that some want the NSW State Government to have a pill testing regime at large youth events. What happened to personal responsibility and normal security? It also seems that some governments want to do it all. This is giving to Caesar what is God’s responsibility or what is our responsibility as individuals, families or villages. If Caesar does it we will pay taxes for it.

    I have long been aware of the salutary warning by Samuel when Israel asked for a king.
    Israel already had an education system, and a judicial system, and when international security was threatened they were able to war successfully. But they wanted a king like all the nations.
    1 Sam 8:11-18. The chorus all the way through is about taxation. “He will take..”
    Eventually the king would take the means of making wealth, v14 “and you will cry for help in that day because of your king… and the Lord will not answer you on that day”. v18
    Nevertheless the people refused.

    We need a government, but a small government is better.
    Small government means taxes, but less of them. Well, that’s the theory.

  • In 1 Samuel 8, the people of Israel are given a clearly negative list of ways a king would mistreat them. The tax rate offered on seed, crops, and livestock is only 10%!!

    In Australia, I’m in the 37% tax bracket!

  • Brilliant expose and the evidence is clear that, as we have become more socialist in our approach, we have inevitably increased out debt and nations being in debt is a Biblical sign of nations that are in sin. What would be a very interesting analysis would be to show just how much of our taxes go to the support of sin. My guess is it is much more than half. Yes we hear of how things like divorce and corporate fraud cost the economy billions of dollars but, under our present system of left wing media bias, these matters are almost never related to the sin involved. All we ever hear about is how the government needs to cover more of what has been caused by sin in the first place. If people were not so insulated from the true monetary cost of sin then I am quite sure people’s attitude to sin would be very different.

    The question as to what tax rates are an ethical rate I think could be partially answered by a requirement for all budget figures to be expressed in average man years of work. At the moment people see and hear of figures with multiple zeros on the end, speaking of billions and trillions of dollars, with absolutely no comprehension as to what these figures actually mean. Having an image of how many people are required to work to produce what the politicians are promising would help people make a much more informed and rational decision regarding the often ridiculously extravagant promises made by politicians who have no problem promising expenditure with extra zeros on the end. While we have absolutely no mental picture of what the government figures mean the meaningless of these figures will inevitably be exploited by politicians.

    Low tax rates mean better turnaround of funds and provide a multiplier effect to the economy but there is one factor you have missed from this analysis, and one which is very difficult to find an analogy with modern economic systems, and that is the year of Jubilee where people were restored to near equal ability to produce. Yes we have incorporated bankruptcy laws which are a rough equivalence to the Biblical forgiveness of debts but the the nearest we have to Jubilee, as far as I can see, is free education and subsidized medical but unfortunately, as with everything that is controlled by the state, these have been exploited relentlessly to just produce more sin. Education facilities are subsidized to teach sin and often atheistic nonsense and we have medical costs for immoral things like abortions and sex changes and promotion of sexual sin all covered by our taxes. Better choice in education and medical costs needs to be given and if socialists disagree and want to continue with the national curriculum we should remind them that Mozart was home schooled plus have the costs of sin readily available to rebuff their unworkable nonsense. Why should good and decent people be constantly subsidizing the increasing prevalence of sin? The way things are going medicals costs are going to continue to skyrocket and sooner or later we are going to have to come up with solutions. All we have really done so far is postponed that reckoning.

  • Dear Bill

    If memory serves Luke 3:12 are John’s words, not Jesus’

  • Thanks David. Yes exactly right – my slip-up. I have made the correction.

  • Bruce Knowling, there is a lot more to be said about those nations and places with inadequate roads, no reticulated services and unsafe water.

    Most of their issues are cultural, and the further away from the Biblical standard they are, generally speaking, the worse the conditions. (Righteousness exalts a nation but sin is a reproach to any people).

    Your recommendations represent the importing of our 20th century Western cultural outlook but the situation for poor nations won’t change unless there is a local cultural change for the better.

    PT Bauer has written much on the failure of imported aid to help these poor nations. So many people live inadequate subsistence lives under the grinding spiritual poverty of hopelessness in the face of overwhelming natural forces. They have only animist religions to guide them towards appeasing the nature gods they believe infest the creation.

    And you want them to increase the burden of taxation? Socialist potentates will do it gladly, but only to line their own pockets!

  • I live in Sweden and it has always been said that we work for the Government/State Monday-Thursday morning, and for ourselves Thursday afternoon-Friday, as our total tax burden is around 70-73%.

    Many churches in Sweden insist also on tithing (another 10% tax on top of the world’s highest tax rates), but it remains unclear whether this is based on gross salary or net.

    My wife is from Mongolia, where tax is relatively low, but church tithing is extreme: a minimum of 10% is expected, 20% is better, but 30% is recommended if you want to be seen as generous!

  • Thanks Bill, a good article and some good comments.
    I would add concerns over tax rates being idolatrous where it requires more given to Ceasar than to God.
    God’s retort to Samuel that “They have rejected me, not you” in asking for a King should be a warning to anyone proposing tax rates above the 10% tithe rate (and, obviously, more government “services” requiring higher tax rates).
    I would add to some of the comments here that the economic improvement in nations came before the higher tax, and was not a cause of their wealth.

  • Yes Bill. I have debated this many a time over the years. I do believe Wayne Grudem is correct; “when a government lowers its tax rates, it actually ends up collecting more money!” Simple maths which the simple minds of the masses will not understand for their lack of knowledge. Which raises the logical question, “Why do some Governments raise the taxes?” And I believe you have penned that answer as well: “Taxes are a powerful tool that can either help or hinder economic growth”. Ie: Control the people!

  • BIll, Interesting, I was just having a naval gazing thought bubble whilst expressing my disdain at the current state of politics – I was depositing waste matter. What if, every corporation every business and every individual were required to pay the same rate of tax based on their gross income. No deductions allowed.
    The Australian tax system is replete with ambiguities, contradictions and paradoxes. On the one hand we all pay our share of Medicare at the same rate @ 1.5% (except for an extra 1% paid by the rich people – who must get sick more often than the rest of us). Corporations are required to pay a minimum of 9.5% superannuation, payroll tax is based on a % of total wages, corporations pay tax at relatively the same rate. However, when it comes to personal tax, everyone is suddenly treated differently. Rich people somehow have to subsidise the poor – who incidentally the ones who make up the majority of those on welfare. It has been constantly touted that the rich have to pay their fair share.
    Well a fair share would be if everyone – be they an entity or a natural person – should pay the same rate % of their gross income.
    Eliminate deductions and impose a flat rate.
    Oh wait a minute wasn’t that the principal behind the tithe?

  • BTW: If the rate of tax was determined each year at budget time by dividing the total cost of governing a country by the total gross income earnt by all entities, then a fair share would be paid.

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