Taxation and the Bible
People who study American history understand that the Revolution of 1776 was fought against the tyrannical abuses of King George III, which Thomas Jefferson describes in the Declaration of Independence as a “train of abuse” and “a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States.” Within the founders’ body of complaints, the Declaration reveals that economic tax issues were among them. If you recall, it was the Boston Tea Party in 1773 that triggered the revolution, which was a response to the new Tea Act, which imposed a tax on the colonists’ tea production. This of course was the culmination of a series of previous taxes which included the Sugar Act, the Stamp Act, and the Townshend Act. The Federalist Papers, which made a case for the Constitution, was, according to political philosopher Gottfried Dietze, “…a classic treatise on federalism and free government and is in a large measure concerned with economic rights.”
The Constitution finally adopted in 1789 had important safeguards that would limit the size and influence of the federal government. Article 1, Section 8 of our Constitution states that Congress is only given the power to: borrow money; regulate commerce with foreign nations; establish rule for naturalization; coin money and fix standards of weights and measures; punish counterfeiting; establish a post office; promote science with patents; establish the lower courts; punish pirates; declare wars; raise and support armies, but only for a term of two years; provide a navy; regulate naval and land forces; call forth a militia to suppress insurrections and invasions; discipline and organize the militia; and administer the nation’s capital.
In his last act as president, James Madison, who is known as the “Father of the Constitution,” vetoed a bill that would have increased taxes with the revenue going to a proposed federal program to build canals and roads. Convinced that this was the responsibility of the individual states, Madison, who I would say knew something about the Constitution, felt that this kind of government expenditure was unconstitutional and therefore required an amendment to adopt it. Back then, the primary source of revenue for the federal government was tariffs or a tax on imported products from overseas. But to give you an idea of the disparity between now and then, when our judges and politicians actually looked to the Constitution for direction, between 1776 and 1915, government expenditures were less than 3 percent of gross national product. When the federal income tax law was enacted in 1913, the top rate was just 7 percent, which increased as a result of World War I but then gradually decreased, fueling the economic boom known as the Roaring Twenties.
Then in the 1940s the Democratic Party under Roosevelt would change that forever by expanding the federal government to unprecedented levels. When the Supreme Court attempted to halt his expansion on the grounds that it was unconstitutional, Roosevelt threatened to add more justices to the Supreme Court. They would be judges sympathetic to his plans. The Court eventually gave in.
Today, federal government expenditures, which the founders were so skeptical of, account for almost 40 percent of our gross national product, while the highest income tax bracket is 39 percent. Once you account for property taxes, sales taxes, corporate taxes, and regulations on businesses, the average American family now works until April 30 just to cover their tax bill.
The government uses our tax dollars to fund and manage parks, schools, buses, housing, welfare, Medicare, Medicaid, Social Security, abortion clinics, trains, sports arenas, air traffic, Indian reservations, farmers, roads, etc. They regulate every conceivable business including hair salons, real estate, drugs, energy, fishing, taxi cabs, car washes, restaurants, and many more. Folks, this may be the intent of our liberal congressmen, but never that of our founding fathers. In fact, if you look at those items listed in Article 1, Section 8 of the Constitution, they seem to be the few things the federal government actually does well: protect us, administer justice, and deliver our mail. The regulation of commerce was limited to commerce with foreign nations.
Of course most Christian know that we should pay our taxes, as it is mandated by Jesus in Mark 12:13-17. But seeing that Christians should be altruistic on the one hand, and support freedom on the other, it begs the questions as to how much is too much taxation and at what point is taxation confiscation. Higher income earners pay as much as 50% of their income toward taxes. For them, it means that three out of six days at work goes without pay, which used to be slavery.
Yet those who advocate for more government and higher taxes always seem to take the high moral ground as if there is some kind of virtue in this. Biblical tradition has always advocated helping the poor but it was on an individual level and a personal choice with your own resources. That is, it is virtuous to help others with your time and money. It is hardly virtuous to advocate helping others with someone else’s resources. During a recent Presidential debate, Bernie Sanders was trying to up Hillary Clinton because he wants to raise the minimum wage to $15 an hour, and she only wants to raise it to $10 an hour. Would that make me more noble if I want to raise it to $30 an hour? How about if I want to give everyone in America a flat screen TV with taxes on the rich, does that make me better than Hillary who only wants to provide free daycare? Of course not. If you want to be virtuous, help someone in need, but it is foolish to think you are virtuous for advocating causes with other people's money.
Few people know that the Bible takes a position on tax rates. It's found in Samuel 8:11,15,17 which reads, "And he said, 'This will be the behavior of the king who will reign over you: … He will take a tenth of your grain and your vintage, and give it to his officers and servants. … He will take a tenth of your sheep. And you will be his servants." Here God is warning the children of Israel of the abuses of government and a king, noting that the king will levy 10% of your production in taxes which is equivalent to being his servant. So according to the Bible 10% is too much taxation.
The Founding Fathers of America always understood the concept of freedom as inversely related to how much you pay in taxes, because the most important freedom we have is the freedom to keep what we work for. They understood that the government cannot give you what it doesn't first take from someone else. The Bible takes a similar view. "And when he had come into the house, Jesus anticipated him, saying, 'What do you think, Simon? From whom do the kings of the earth take customs or taxes, from their sons or from strangers?' Peter said to Him, 'From strangers.' Jesus said to him, 'Then the sons are free. Nevertheless, lest we offend them, go to the sea, cast in a hook, and take the fish that comes up first. And when you have opened its mouth, you will find a piece of money. Take that and give it to them for Me and you” (Mathew 17:25-27). The sons were free because they didn't have the burden of taxes, which is work without pay.
What about those big corporations? Surely they should pay their fare share of taxes. Well, here’s the problem we must understand before we raid the coffers of corporate America. Corporations don’t pay taxes, consumers do. Corporate taxes are reflected in the prices we all pay. When we buy a gallon of gas in America, we pay up to 60 cents per gallon in federal and state taxes. It is naive to think that when we raise taxes on corporations that it will come out of their profits and therefore the investors and owners pay. Yes it is a tax on profit, but investors and business owners determine their return based on after-tax profits. So as you raise taxes on these companies, they all simply raise prices to cover the difference. Every time we spend money, the price of the products we buy are laden with direct or indirect taxes, all of which suppress demand and lower our standard of living. I’m not saying successful companies shouldn’t pay taxes; I just want to point to the reality that when companies are taxed, everybody pays—the rich and the poor. So don’t be taken by this emotional misrepresentation which has widespread appeal to those who don’t know better.
Going forward, the right policies should seek to shift government programs to the more efficient private sector. We should roll back the endless web of mindless regulations on businesses which cost consumers so much and stifle economic growth. We should hold government programs and employees accountable through performance standards and roll back the ridiculous labor laws that reward complacency and make government so expensive and ineffective. Our government doesn’t need more revenue; it needs to use our money more responsibly. It needs to be more accountable and it needs to be more efficient. Maybe then we can reward our bureaucrats with more of our hard-earned tax dollars, but if that happens they won’t need it.
The Constitution finally adopted in 1789 had important safeguards that would limit the size and influence of the federal government. Article 1, Section 8 of our Constitution states that Congress is only given the power to: borrow money; regulate commerce with foreign nations; establish rule for naturalization; coin money and fix standards of weights and measures; punish counterfeiting; establish a post office; promote science with patents; establish the lower courts; punish pirates; declare wars; raise and support armies, but only for a term of two years; provide a navy; regulate naval and land forces; call forth a militia to suppress insurrections and invasions; discipline and organize the militia; and administer the nation’s capital.
In his last act as president, James Madison, who is known as the “Father of the Constitution,” vetoed a bill that would have increased taxes with the revenue going to a proposed federal program to build canals and roads. Convinced that this was the responsibility of the individual states, Madison, who I would say knew something about the Constitution, felt that this kind of government expenditure was unconstitutional and therefore required an amendment to adopt it. Back then, the primary source of revenue for the federal government was tariffs or a tax on imported products from overseas. But to give you an idea of the disparity between now and then, when our judges and politicians actually looked to the Constitution for direction, between 1776 and 1915, government expenditures were less than 3 percent of gross national product. When the federal income tax law was enacted in 1913, the top rate was just 7 percent, which increased as a result of World War I but then gradually decreased, fueling the economic boom known as the Roaring Twenties.
Then in the 1940s the Democratic Party under Roosevelt would change that forever by expanding the federal government to unprecedented levels. When the Supreme Court attempted to halt his expansion on the grounds that it was unconstitutional, Roosevelt threatened to add more justices to the Supreme Court. They would be judges sympathetic to his plans. The Court eventually gave in.
Today, federal government expenditures, which the founders were so skeptical of, account for almost 40 percent of our gross national product, while the highest income tax bracket is 39 percent. Once you account for property taxes, sales taxes, corporate taxes, and regulations on businesses, the average American family now works until April 30 just to cover their tax bill.
The government uses our tax dollars to fund and manage parks, schools, buses, housing, welfare, Medicare, Medicaid, Social Security, abortion clinics, trains, sports arenas, air traffic, Indian reservations, farmers, roads, etc. They regulate every conceivable business including hair salons, real estate, drugs, energy, fishing, taxi cabs, car washes, restaurants, and many more. Folks, this may be the intent of our liberal congressmen, but never that of our founding fathers. In fact, if you look at those items listed in Article 1, Section 8 of the Constitution, they seem to be the few things the federal government actually does well: protect us, administer justice, and deliver our mail. The regulation of commerce was limited to commerce with foreign nations.
Of course most Christian know that we should pay our taxes, as it is mandated by Jesus in Mark 12:13-17. But seeing that Christians should be altruistic on the one hand, and support freedom on the other, it begs the questions as to how much is too much taxation and at what point is taxation confiscation. Higher income earners pay as much as 50% of their income toward taxes. For them, it means that three out of six days at work goes without pay, which used to be slavery.
Yet those who advocate for more government and higher taxes always seem to take the high moral ground as if there is some kind of virtue in this. Biblical tradition has always advocated helping the poor but it was on an individual level and a personal choice with your own resources. That is, it is virtuous to help others with your time and money. It is hardly virtuous to advocate helping others with someone else’s resources. During a recent Presidential debate, Bernie Sanders was trying to up Hillary Clinton because he wants to raise the minimum wage to $15 an hour, and she only wants to raise it to $10 an hour. Would that make me more noble if I want to raise it to $30 an hour? How about if I want to give everyone in America a flat screen TV with taxes on the rich, does that make me better than Hillary who only wants to provide free daycare? Of course not. If you want to be virtuous, help someone in need, but it is foolish to think you are virtuous for advocating causes with other people's money.
Few people know that the Bible takes a position on tax rates. It's found in Samuel 8:11,15,17 which reads, "And he said, 'This will be the behavior of the king who will reign over you: … He will take a tenth of your grain and your vintage, and give it to his officers and servants. … He will take a tenth of your sheep. And you will be his servants." Here God is warning the children of Israel of the abuses of government and a king, noting that the king will levy 10% of your production in taxes which is equivalent to being his servant. So according to the Bible 10% is too much taxation.
The Founding Fathers of America always understood the concept of freedom as inversely related to how much you pay in taxes, because the most important freedom we have is the freedom to keep what we work for. They understood that the government cannot give you what it doesn't first take from someone else. The Bible takes a similar view. "And when he had come into the house, Jesus anticipated him, saying, 'What do you think, Simon? From whom do the kings of the earth take customs or taxes, from their sons or from strangers?' Peter said to Him, 'From strangers.' Jesus said to him, 'Then the sons are free. Nevertheless, lest we offend them, go to the sea, cast in a hook, and take the fish that comes up first. And when you have opened its mouth, you will find a piece of money. Take that and give it to them for Me and you” (Mathew 17:25-27). The sons were free because they didn't have the burden of taxes, which is work without pay.
What about those big corporations? Surely they should pay their fare share of taxes. Well, here’s the problem we must understand before we raid the coffers of corporate America. Corporations don’t pay taxes, consumers do. Corporate taxes are reflected in the prices we all pay. When we buy a gallon of gas in America, we pay up to 60 cents per gallon in federal and state taxes. It is naive to think that when we raise taxes on corporations that it will come out of their profits and therefore the investors and owners pay. Yes it is a tax on profit, but investors and business owners determine their return based on after-tax profits. So as you raise taxes on these companies, they all simply raise prices to cover the difference. Every time we spend money, the price of the products we buy are laden with direct or indirect taxes, all of which suppress demand and lower our standard of living. I’m not saying successful companies shouldn’t pay taxes; I just want to point to the reality that when companies are taxed, everybody pays—the rich and the poor. So don’t be taken by this emotional misrepresentation which has widespread appeal to those who don’t know better.
Going forward, the right policies should seek to shift government programs to the more efficient private sector. We should roll back the endless web of mindless regulations on businesses which cost consumers so much and stifle economic growth. We should hold government programs and employees accountable through performance standards and roll back the ridiculous labor laws that reward complacency and make government so expensive and ineffective. Our government doesn’t need more revenue; it needs to use our money more responsibly. It needs to be more accountable and it needs to be more efficient. Maybe then we can reward our bureaucrats with more of our hard-earned tax dollars, but if that happens they won’t need it.