A Christian approach to taxation

There are two important questions on the recent budget. The first is whether or not the Chancellor, Rachel Reeves, was or was not misleading in her statements prior to the budget in regards to the financial situation the federal government was facing. The second is whether or not the tax increases in her budget were or weren’t justified. In this text I shall be taking a look at how the Christian faith provides a framework for enthusiastic about the second of those questions.  

We must begin by enthusiastic about the role of presidency, for the reason that imposition and collection of taxes is a function of presidency. As far back as biblical times taxation is something that governments do, as may be seen within the query put to Jesus in Matthew 22:17, ‘Is it lawful to pay taxes to Caesar or not?’ Caesar has governmental authority and so taxes receives a commission to him. 

The Christian faith tells us that on the planet to return human beings will come under the direct rule of God in his everlasting kingdom. As Obadiah 21 succinctly puts it, ‘the dominion shall be the Lord’s.’ Human governments are thus an interim phenomenon until that day comes. However, based on New Testament passages equivalent to Romans 13:1-7 and 1 Peter 2:13-17, Christians have consistently held that although governments only have an interim existence and although governments can turn out to be oppressive (see Revelation 13), nevertheless the existence of presidency as such is something that’s positive and indeed God given.

A government’s role isn’t to do the whole lot in society, since individuals, families and other social organizations (including the Church) each have their very own proper role to play in enabling human well-being. Rather, as each Romans 13 and 1 Peter 2 emphasize, the role of presidency is to advertise the well-being of human societies under God by performing acts of judgement in response to wrongdoing. The final coming of God’s kingdom will bring a couple of state of perfect justice through an act of judgment through which all wrongs are put right, and the role of presidency is to provisionally anticipate that final state of justice by undertaking acts of judgement within the here and now. 

The acts of judgement performed by governments may be either reactive or proactive. They are reactive after they reply to acts of wrongdoing which have already been committed: as when someone commits a criminal offense and is punished by the state. They are proactive after they are intended to stop types of wrongdoing which might be foreseen. 

These proactive acts of judgement can either be direct prohibitions of certain types of motion, or they may be ways of encouraging activity that may prevent a improper occurring. For example, a government could tackle drug addiction by banning certain drugs, but it surely could also run an education campaign to influence those that not popping up is an excellent idea. For one other example, the payment of unemployment advantages is a way of stopping the improper that might occur if people had nothing to continue to exist while they were on the lookout for work, and government financed job training is a way of stopping the improper of individuals lacking the talents to interact in productive work. 

In order to perform their activities, governments need money. In a world like ours through which money is the first technique of exchange for goods and services (I offer you money and also you provide me with food; I offer you money and also you take care of me after I am sick etc.) governments, identical to individuals, families, and other organizations, require money to be able to perform their activities, by directly employing people to do things, by paying individuals and groups outside government to do things, and where crucial providing each with the facilities and tools they should do things. For example, a government that has a military needs money to pay soldiers and to coach, equip and deploy them. Likewise, a government that has responsibility for education needs money to employ teachers and other staff and to construct, maintain and equip schools.   

The need for money is the fundamental reason why governments need to lift taxes. Governments can, in fact, borrow money, but the issue with borrowing money is that at some stage loans should be paid back. Without tax revenues a government cannot pay its loans back and when this happens governments (and the countries they govern) are in big trouble – because the Greek government debt crisis between 2009 and 2018 amply demonstrated. Governments could also raise money through robbery by attacking other countries and stealing their assets, but this could be each highly immoral (it’s a breach of the commandment against theft in Exodus 20:15) and economically dangerous (wars are very expensive).  

As well as their basic function of raising money for governments, taxes even have a job to play in acts of proactive judgement by governments. This is because governments can use taxes to discourage people from engaging in certain activities, and tax incentives to encourage them to interact in others. For example, if it was judged that excessive use of personal cars was contrary to the common good since it was damaging to the environment, a government could determine to lift taxes on private motoring as a deterrent and will give tax incentives to encourage people to make use of public transport as an alternative. In similar fashion governments could raise taxes on unhealthy food to discourage people from buying it and use tax revenue to subsidize healthy food to encourage and enable people to purchase that as an alternative. 

The framework for understanding the character and purpose of taxes I even have just sketched out helps to grasp how Christians should view the tax policy of any given government. 

Christians are under an absolute obligation to pay their taxes. In the words of Paul, they’re to pay ‘taxes to whom taxes are due’ (Romans 13:7) as a part of their general obligation to honour the God given authority of presidency. As John Stott puts in his commentary on this verse, ‘Christians who recognize that the state’s authority and ministry come from God will do greater than tolerate it as if it were a crucial evil. Conscientious Christians will undergo its authority, honour its representatives, pay its taxes and pray for its welfare.’ 

However, although Christians should accept that governments thus have a right to lift taxes and Christians have an obligation to pay them, this doesn’t mean that Christians should approve of all types of taxation that governments may determine to impose. Recognizing that Caesar has a right to demand taxes is one thing. Thinking that Caesar is true to require payment of a specific type of tax is one other. 

The reason for this distinction is that it is feasible for governments, as fallible human institutions, to introduce taxes which might be either (a) unjust or (b) ill-advised. 

Taxes that might fall into the primary category are: 

• Taxes which might be raised to be able to pay for unjust types of activity. From a Christian perspective for instance, taxes could possibly be seen as unjust in the event that they were raised to pay for an unjust war, to support a LGBTQ+ social agenda, or to fund abortion or euthanasia. 

• Taxes which might be so heavy that they mean that individuals lack the cash they should make sure the well-being of themselves and their families. As we’ve noted, the function of presidency is to advertise human well-being and from this it follows that a level of taxation that’s so high that it prevents human well-being is unjust. 

Taxes that might fall into the second category are those which may be well-intentioned but have negative unintended consequences. 

For example, a government might determine to guard the agricultural sector of its economy by imposing taxes on imported food to make it costlier. The imposition of such taxes might well profit local farmers, but it surely could even have the unintended side effect of creating the price of food unaffordable to those on low incomes.  

For one other example, a government might determine to extend taxes on businesses. There is nothing improper with this in principle, but a tax on businesses could be ill-advised if it had the unintended consequences of stopping businesses having the ability to afford to employ people, or forcing them to lift the worth of their goods or services to levels that their customers couldn’t afford to pay. 

For a final example, a government might determine to impose additional taxes on the wealthiest members of society. Again, there may be nothing improper in principle about this concept because it isn’t unjust that those that can afford to pay more in tax should achieve this. However, a wealth tax could be ill-advised if the unintended consequence was for the rich to maneuver themselves or their money abroad thus causing the federal government’s tax revenue to fall and restricting its ability to interact in only activity. 

All of because of this while Christians may not rightly refuse to pay taxes, they’ll, and so they should, critically examine the forms and levels of taxation imposed by any government, asking whether the taxes are only and whether or not they have harmful unintended consequences. If either is the case, they need to argue for the federal government’s tax policy to vary. Carefully examining a government’s tax policy may not seem a really exciting exercise to those that will not be economists or accountants, but it surely is a crucial one if Christians are to hunt the welfare of the societies through which God has placed them (Jeremiah 29:7).  

In relation to the recent British budget, the 2 big issues that should be considered are (a) whether the federal government needed to lift taxes so as fund its spending and (b) whether it was right to lift taxes to extend the extent of welfare advantages.

Within the Christian framework I even have set out above, the critical questions that Christians must ask in relation to (a) are whether in actual fact the federal government was told by the Office for Budget Responsibility that there could be a sufficient increase in government revenue to cover government expenditure without raising taxes but decided to extend taxes anyway, and whether this then signifies that tax increases were unjust because unnecessary. 

The critical questions with regard to (b) are whether justice required a rise in welfare advantages to extend the well-being of those receiving advantages, even when this meant a decrease within the well-being of those asked to pay additional taxes although they’re struggling financially, and whether this increase in advantages may have the unintended consequence of discouraging those on advantages from on the lookout for work and subsequently end in a rise within the number of individuals deciding to proceed living off the state and, subsequently, off their neighbours. 

The Christian tradition has all the time held that those that can earn a living should achieve this reasonably than being content to live off others. That is the purpose of Paul’s declaration in 2 Thessalonians 3:10, ‘If anyone is not going to work, let him not eat.’  However, the query with regard to welfare advantages is methods to uphold this principle in a way that doesn’t unjustly punish those that cannot work, because work isn’t available, because they’re physically or mentally unwell, or because they’ve full-time caring responsibilities, and whether the recent budget got the balance right on this issue. 

In principle, subsequently, it is true for Christians to critically scrutinize the recent budget and to be prepared to challenge it where crucial. However, such challenges have to be based on a properly informed understanding of what the federal government has done and an informed Christian understanding of what taxes are for, what makes them just or unjust, and the danger of unintended consequences.