Every day, whether we make money or spend money or even hold money in a bank, we will inevitably pay some form of tax. Benjamin Franklin, one of the Founding Fathers of the United States of America, is attributed with saying that “There are only two things certain in life: death and taxes”.
Whether it is about imposing tax, enforcing tax laws or raising taxes, it is a topic which can cause much frustration, argument, politics or wars, both historically and today.
How should we be thinking about tax? What does the Bible say about taxation? Is taxation really theft or can some forms of taxation be okay?
The Bible and taxation
One of the most famous passages from the Bible which talks about taxation is Jesus’ interactions with the Pharisees who asked if it was lawful (under Jewish law) to pay taxes to Caesar and the Roman Empire (which occupied Jerusalem at the time).
Jesus responded by asking the Pharisees to show him a Roman coin and announcing that we should “render to Caesar the things that are Caesar’s and to God, the things that are God’s” (Matthew chapter 22, verses 15-21).
Jesus’ teachings summarised how Christians approach and relate with government and authorities. We are to submit to authorities because those authorities have been instituted there from God (Romans chapter 13, verses 1-7). The role of the authorities (government) is to execute God’s judgment on evil.
In the Old Testament, we also see that when Israel wanted a king, God warned them that having a king would result in the king taking some workers, resources, produce and herds to serve and protect the kingdom. (1 Samuel chapter 8, verses 10-18).
From a quick glimpse of these passages, we can surmise that we need to submit to authorities and pay our taxes. This is for running our society, protecting our country, enforcing laws and regulations, and executing judgment and justice where necessary.
How much should our governments tax?
Without taxation, our governments may not have the funds to function. However there is a very big and legitimate question of “How much should we be taxed?” Each country has a differing view and approach to this.
On one hand, countries such as Singapore have relatively low tax rates with Income Tax capped at 22% (for every dollar you make 22 cents goes to the government) and Corporate Tax Rate at 17% (for every dollar a company is in profit, 17 cents goes to the government). This means that both citizens and companies get to keep more of their income to save, invest or spend it however they choose to.
On the other hand, countries such as Sweden or Denmark have very high tax rates of up to 55% in Income Tax and 22% in Corporate Tax. A large part of the reason why the tax rates are high is because their governments provide more social security in terms of health care and unemployment benefits.
Determining how and how much our governments should tax us is dependent on the size of our government and the level of expenditure. Countries and states which choose to provide a more generous and larger safety net (whether for health, social welfare or education) for its citizens will inevitably see higher taxation in order to cover those costs.
Who do we rely on?
There is no right answer for the question of “How much should our governments tax us?” In countries such as the United Arab Emirates, much of their government revenues come from oil exports, which means they do not have a necessity to increase the tax base. Smaller countries might not have as many alternate sources of revenue and will inevitably need to draw from local businesses and citizens.
The problems that policy makers face on taxation is inherently an economic problem. There are simply too many things we want to try and solve through government, but only so much time, money and resources we have to deploy to resolve it. The more we try and get government to resolve issues, the greater impact that will have on our tax base.
Today, for many working Australians, income we earn from almost 1-1.5 days out of each full working week goes to pay taxes. If we want to reduce our tax base, we would need to reduce the amount of government expenditure and the scope of government involvement in our lives.
A government that is excessive in its taxation or spending is ultimately stealing from its constituents and wasting their money. We need to be politically active in our democratic government as it is ultimately accountable to its constituents. One part of being politically active is to help keep our government accountable for its spending and taxation so that it is not in excess in its scope, spending or taxation.
As citizens, we should also make sure we are not unknowingly worshiping government and seeing it as the solution to everything. We should instead be relying on God.
When we are trying to solve societal issues, the solution may not simply be to raise taxes and start a government program to correct it. Instead, it might be our responsibility individually and locally at a council level, a community level and/or a church level to step up and try and solve the issue. It might mean we should start first by turning to God in prayer, repenting and committing our worries and issues to God before we turn to the government.
Brandon Tsang is a Sydney-based writer currently working in IT. He studied Marketing and Economics at UNSW and loves to spend his spare time hiking, playing volleyball or watching Netflix.
Brandon Tsang’s previous articles may be viewed at http://www.pressserviceinternational.org/brandon-tsang.html