Taxation is Theft

Modern governments face a serious problem. If tax rates are set too high, people stop trying to earn more and the government loses revenue. To resolve this problem, economists have put considerable effort into designing efficient taxation systems. An efficient tax is one that collects as much revenue as possible without changing behaviour. However, this effort is misguided, as taxation has nothing to do with efficiency. Taxation is a moral issue. 

Here is a key moral question. What gives governments the authority to take money from people without their consent? If an individual or business takes something from another person without permission, they have committed a theft. Stealing is taking another persons money. It is morally wrong. Even if I take a rich person’s money to give it to someone who is poor, most people would consider it stolen.

People believe that they should be able to do what they like with their own money, provided they do not commit a crime. If someone wants to give away their money that is fine, but giving away another person’s money is wrong. Why does this not apply to governments?

Governments seem to operate under a different set of rules. We allow governments to tax as much money as they like and do what they like with it without protesting or resisting. If person or business treated us in this way we would all be screaming about theft. Yet we happily allow government’s to a third of our income and spend it on programmes we do want and people we do not like. Why is this acceptable?

Taxation and Democracy

Some political scientists talk about a social contract that we have made with the state, but this contract has never existed. I have never entered into a contract with the state.

Others suggest that democracy confers on governments the authority to tax. However, the fact that a government is elected does not mean it has authority to impose taxes on anyone, as they may have voted against it. The most that can be said is that a democratic government might have authority to tax those who voted for it. However even this will not do, as many who vote for a government might not have supported its tax policy. Or they might have voted to avoid a worse option.

Everything we own belongs to God. By giving the government authority to take our wealth, we are making it into a god. The corollary is that we expect the government to provide full salvation. However, most governments are a poor imitation of the true God.

Nothing in the scriptures allows governments to impose compulsory taxes. The biblical tithe is sometimes used to justify taxation, but the tithe was voluntary. Compulsory taxation cannot be justified from the bible. Taxation is theft.

Avoiding Tyranny

The best protection against tyranny is voluntary taxation. Governments become powerful, because they have greater resources than any other institution in society. The power of taxation is the source of their enormous resources and power. If governments have no power to tax, they also lose their power. People will only make voluntary tax payment to the government, if they support its policies (a more accurate way of voting). If the government starts doing things that are not supported, their finances will dry up. Before they can start on a new programme of spending, they will have to persuade their citizens to pay for it. The state becomes another business offering services to those who will pay the price.

The greatest danger in a society where the only government is local judges applying the law is that a judge might try to take on an expanded range of duties. The most important constraint against judges expanding their power will be their inability to impose taxes. The people would just withdraw their financial support for the judge. If a judge were to attempt to collect compulsory taxation using the staff they employ to collect restitution, the people could take a case of theft to another judge. The judge with big ideas would be labelled as a thief and would quickly lose their credibility. They would no longer be able to act as a judge.

Voluntary taxation is the best protection against tyranny. It may not prevent it completely, but if the ruler imposing compulsory taxation is portrayed as thief, they will not last long. A modern government can enforce taxation, because it is seen as a saviour and not a thief. We must dispel this myth.

Voluntary Subscriptions

When I was young, I lived in a rural area. Many of the social, sporting and special groups that thrived met at a local public hall that had been dilapidated by time. Many of the people in the district believed that the time had come for building a new hall. A voluntary committee of interested people was formed. All the groups that used the hall made sure they were represented.

The members of the committee canvassed the entire district to get donations for the new hall. Some people would commit to a regular donation over several years. Some of the groups that used the hall made donations. When about half the money needed had been raised, a contractor was engaged to build the hall. A loan was raised to cover what had not been raised. The fees for the user of the new hall were set at a level, which would allow the loan to be paid off over time.

No compulsion was involved. People not wanting to use the hall did not have to contribute to its cost, although some did (see Free Riders). The money was raised by the people, so they decided on the style of hall that they would build. All groups that used the hall were involved, so they go the facilities that they wanted.

A few years later, a similar approach was used to obtaining funding for a new water supply scheme. A whole range of local facilities can be funded by voluntary subscription.

The modern view is that taxation is the only way to fund local facilities. This is not true. Collecting subscriptions from the people who will use the facilities is a far better way, because the local people will get what they want and what they are willing to pay for, rather than what politicians think they need.

Render to Caesar

Jesus dealt with the tax issue when confronted by the Jews.

They hoped to catch Jesus in something he said so that they might hand him over to the power and authority of the governor. So the spies questioned him: "Teacher, we know that you speak and teach what is right, and that you do not show partiality but teach the way of God in accordance with the truth. Is it right for us to pay taxes to Caesar or not?"

He saw through their duplicity and said to them, "Show me a denarius. Whose portrait and inscription are on it?" "Caesar's," they replied. He said to them, "Then give to Caesar what is Caesar's, and to God what is God's." They were unable to trap him in what he had said there in public. And astonished by his answer, they became silent. (Luke 20:20-26).

This incident has caused a lot of confusion.

The usual interpretation is that Caesar’s image and name on the coin proves that he owns it, so it must be give back to him if he asks for it. This is economic nonsense. An image on a coin proves nothing. New Zealand five dollar notes have a picture of Edmund Hilary, the first person to climb Mount Everest. To suggest that he owns every five dollar note is absurd. The coin that Jesus looked at belong to the person who had given it, unless it was stolen, and then it belonged to the person it was stolen from. It did not belong to Caesar.

Jesus was telling the people to pay to Caesar what they owed him. Caesar had provided them with a service by minting coins. Having a coinage that was accepted through the world was a benefit for those engaged in trade, so they owed him something for that service. Rome may have provided roads that were beneficial to their communities. Maybe Caesar also provided some justice services (I am not sure how much), so they owed him something for that. Caesar had not defended them, so they owed him nothing for defence.

By way of contrast, everything belongs to God, so we must submit everything to him. Jesus had declared over and over again that all authority belongs to God. Even the Son of God must submit to the authority of God. Since all authority belongs to God, so we must submit to God in everything him. This applies to Caesar as well as to ordinary people. Caesar must give to God, everything that belongs to him. A political power cannot be above God

Jesus statement about giving to Caesar has been used to develop a theory that Jesus rules the church and the spiritual life and that political powers control the political and economic dimension of life. This is nonsense. Jesus could not assign authority over the political dimension to Caesar, because all authority belongs to God. He could not give authority to make laws to political dictators or parliaments, because God is our law maker and has already given us the law that we need. God is not interested in power-sharing with Caesar, or any of his successors.

When Jesus said to give to Caesar what belongs to him, he was not giving Cesar authority over secular life. He was not legitimising political power. He was simply restating the biblical principle that stealing is wrong. If the people had accepted a service from Caesar, they owed him payment. If he had taken more than he had given, they owned him nothing.

Giving

Jesus told people to “give” Caesar what they owed him. He did not say paying tax was compulsory. Giving is a voluntary concept. If something is taken by force, it is not given. If someone steals your car, you do not say “I gave it to the thief”. We must choose to give, or it is not giving. Jesus told us to give what we owe to Caesar. This confirms that he was talking about something voluntary and not compulsory payment of taxes. Jesus was teaching that all payments to the state should be voluntary.

Failure to pay taxes is not a crime. There is no punishment specified in the Old Testament law for failure to pay either tax or tithe. Restitution can only be enforced when a person has stolen something that belongs to another or has breached a contract to make a payment. We do not have a contract with the state, so we only owe payment for what we have personally asked the state to provide. A state that demands payment of taxes is like a mail order company sending out unsolicited goods and demanding payment for them. Because the person receiving the goods has not entered into a contract to buy them, they do not owe anything.

Jesus and the Temple Tax

An interesting incident occurred when Jesus came to Capernaum.

The collectors of the two-drachma tax came to Peter and asked, "Doesn't your teacher pay the temple tax?" "Yes, he does," he replied.

When Peter came into the house, Jesus was the first to speak. "What do you think, Simon?" he asked. "From whom do the kings of the earth collect duty and taxes—from their own sons or from others?" "From others," Peter answered.

Then the sons are exempt," Jesus said to him. "But so that we may not offend them, go to the lake and throw out your line. Take the first fish you catch; open its mouth and you will find a four-drachma coin. Take it and give it to them for my tax and yours." (Matt 17:24-27).

Peter made the mistake of speaking for Jesus without checking with him first, so he had to put things right. Jesus made two important points. The first was that the sons of kings do not pay tax. This referred back to the practice during the time of King Saul (1 Samuel 17:25). Jesus is a son of the King of the Universe so he does not have to pay tax an earthly power.

When Jesus ascended into heaven he became our king and we became sons of the king. As sons of the true king, Christians are not required to pay tax to a king. We cannot serve to kings. If we accept Jesus as our king, we cannot serve another king by acknowledging his right to impose taxes.

Jesus second point was that at times it is better to keep the peace than to stand on your rights. He chose to pay the tax voluntarily to avoid embarrassing Peter. Christians will sometimes choose to pay taxes to political powers, because they do not want to get distracted from their work for God. When they pay tax they are following Jesus example. They are not morally obliged to pay the tax, but they will pay up to avoid unnecessary offence. For Christians, payments to political powers are voluntary. We are only required to pay for services that we have received.

Public Authorities

Only two paid public roles can be justified from the scriptures.

• Busy local judges
• Temporary military leaders

All payments to both these ministries should be voluntary.

1) Payment of Judges

An important issue for Christians is the payment of judges. If judges are God’s servants do they have authority to impose taxes for their support? The answer is a loud “No”. In a godly society, being a judge will be a part-time work. Most local communities will not have enough cases to occupy a full-time judge. Judges will be able to earn their living by pursuing another career.

If a case is complicated and involves a lot of work for the judge, litigants might be requested to pay costs. The biblical principle that a workman is worthy of his wages would apply (1 Tim 6:18). Appeal judges hearing a lot of cases might also need payment for their work. The person causing the case and the person benefiting would have a responsibility to cover the costs of the judges.

As the kingdom of God expands, the incidence of crime will decline and there will be less work for judges. Sometimes the people of a community might decide to pay a good judge a retainer so that they might always have a judge that they trust available to hear cases when they arise. This would give the judge time to study God’s law and keep update with decision being made by other judges. Any contributions to the retainer would be voluntary and should not give those who pay any benefits in terms of justice.

Voluntary Contribution

God’s people want everyone to have access to good judges. To ensure this happens, we should provide financial support to the best judges, so that they can handle more cases. Paul encourages this giving in Roman 13:6, but his meaning is lost due to the way the passage is translated. Most modern translations insert the word government, which is not in the greek text. Here is a more literal translation:

For this reason, you also pay tribute: for they are God's servants, attending continually to this very thing (Rom 13:6).

This passage is not a justification of general taxation by governing authorities. Payment should only be made to God’s servants. In this context, God’s servants are the judges who are busy hearing many cases and especially those dealing with many appeals. They are the excellent judges who are working continually on the thing that Paul is talking about in this passage: applying God’s law to disputes between people.

We want them to be available for this task, so that sin is restrained and society remains peaceful and harmonious. For this reason we should make voluntary payments to these judges, so that they can work full time at their work. A “tribute” is a payment made by one person to another, or one nation to another, for protection. Paul is saying that those who do not need a judge in their current situation, can submit to an excellent judge by voluntarily contributing to a retainer for them.

Voluntary Payments

The principle of voluntary payments to judges is confirmed in Romans.

For because of this you also pay taxes, for they are God’s ministers attending continually to this very thing. Render therefore to all their due: taxes to whom taxes are due, customs to whom customs, fear to whom fear, honor to whom honor (Rom 13:6,7 NKJV).

This passage also states that judges are God’s servant. The thing that they are “attending continually” is the punishment of law breakers.

The work translated as “taxes” is phoros, which has the root meaning “burden”. I find it ironic that a word for burden is translated as tax. Paul is actually making a play on words. He had earlier said that judges carry the “burden” of the sword (Rom 13:4). Their burden is a responsibility to provide justice to everyone without fear or favour. This gives Christians a burden to ensure that they are supported in this work, especially if they are attending to this work continually.

The meaning of the word phoros has a strong sense of compensation. The Roman Empire required a phoros from every province as compensation for providing defence. So when Paul is saying we must pay the burden, he is saying that we must compensate judges for providing justice for us.

Valuation of a Judge

The word “render” literally means “give back”, and includes a strong sense of repayment or paying back. Paul does not give judges the right to impose taxes, but he does give Christians responsibility to support their judges. He is commanding them to pay the judge for the benefits they receive through having a good system of justice. Judges cannot decide what they are worth to the people of the community. Only the people can decide what value they place on justice. They are the only ones who can decide what they receive.

Some people may decide they do not care about judges and pay nothing. Most will decide that good justice is worth having and make a contribution, just as most people freely pay for fire insurance. They will hope that they will not need a judge, but they will be willing to pay a small amount to ensure that a good judge is there when they need one.

At the end of verse 7, we are told to honour those to whom honour is due. God does not expect us to worship any human. The Greek word is translated as honour is “timé”. The root meaning of this word is “price”. The basic meaning of the verb is to “set a price” or “determine the value” of an object. The idea of honour is derived from this concept of valuation. So Paul is not commanding us to honour judges in the modern sense of the word, but to evaluate a judge and decide what he is worth. We should be making a payment to a judge based on what we perceive that he is worth.

A judge or authority should not decide what he is worth. Citizens will decide themselves what the judge is worth. Judges cannot impose taxes, but they should be paid what they are worth to their community. All taxation is voluntary so it ceases to be a tax. It is a burden we owe to those who have provided justice to us. Paul concludes his teaching on civil government by saying.

Owe no one anything except to love one another, for he who loves another has fulfilled the law (Rom 13:8).

2) Paying Military Leaders

Samuel warned the people of Israel that a king would be costly to maintain. The reason is that a king is a permanent military leader with the power to tax.

Military leaders are dangerous because they have control of powerful weapons. They have the means to impose their will on the people they are supposed to protect. If they also have the power to impose taxes, there are no limits their power. A misguided military leader could build a large empire without opposition.

Giving military leaders authority to levy taxes allows them to decide the level of military protection needed by a community. This is inappropriate because they will have a biased view of the value of the services to their citizens. The person providing a service cannot decide its value. Only the person receiving the service can decide its value.

Citizens are the only ones who can decide what value they put on military protection. Paul said that we should pay military leaders what they are owed, based on the value of what we have received (Rom 13:7). Citizens are the only ones one who can decide what I owe to the military leaders.

If military leaders can decide what they are owed, they will become dangerous. They will tend to have an inflated view of their own importance and will demand more than they are worth. As military leaders have the power of the sword, they will be able to force people to pay what they believe is needed. This can only lead to tyranny.

The best way to limit the power of a military leader is to limit the resources they control. Just as payments to judges are voluntary, military leaders should not have authority to impose taxes.

Voluntary Payment

A good protection against oppression is to make payments to military leader voluntary. They will then have to persuade citizens that their service is of value to them. In a peaceful situation, they may need to provide additional services, like civil defence and fire services to encourage people to support them.

The amount that people will be willing to pay for military protection would depend on the risk of invasion. If the nation were loyal to God, the risk would be quite low. If there was no permanent army, military protection would be quite cheap. Insurance companies might be prepared to pay some the cost of military protection, but it would still be a voluntary payment and not a compulsory levy.

Most people freely pay house insurance to get protection in case their house burns down. In the same way, most people would be willing to pay a military leader to provide defence against threat of external attack. Some people would refuse to pay and freeload on those who did pay. We should not complain, because we are all freeloaders on Jesus salvation.