How should Christians view paying taxes?

The following article is from the latest edition of Affinity’s Social Issues Bulletin which is free to download.

Rev. Thomas Penman is the minister of South Uist and Benbecula Free Church. He is married and has two daughters. Prior to full time ministry he worked in the chemical industry.

According to R C Sproul, the position we take on taxes is very important. He claims that ‘Anytime you vote a tax on somebody else that is not a tax on yourself, you’re stealing from your brother.’ Voting for the wrong policy would be something to repent of. If the claim of stealing is taken seriously it would lead to church discipline for someone who was unrepentant about the way they voted. If the tax itself were to be viewed as theft this could also have serious implications for welfare claimants, public sector teachers, military personnel, or business who accept government contracts as the Westminster Larger Catechism prevents Christians from ‘receiving anything that is stolen’. Our view of taxes really matters.

Sproul is concerned that in a representative republic, Christians might be tempted to vote for tax policies that enrich themselves at the cost of others. This is why he uses the strong language of theft. Instead Sproul advocates for a flat tax. Wayne Grudem also supports a flat tax. Both Sproul and Grudem base their views on the example of the Old Testament tithe which was set at the same percentage across all sections of society. Grudem also claims the Old Testament view of inheritance makes the US Estate Tax (similar to the UK’s Inheritance Tax) deeply immoral and therefore should be abolished on biblical grounds. 

This article will examine what is a biblical approach to taxation and will argue that the Bible does not require either a flat tax or the scrapping of inheritance tax. While having sympathy with the positions of Grudem and Sproul (and even agreeing with other parts of their argument) the position this article takes is that the biblical view of tax and economics does not fit easily into existing political categories. It requires a much more radical rethink than the binary choice of traditional left wing and right wing politics. The church should promote biblical principals in these areas while being very cautious of making legalistic demands of its members as to what specific policy or party they should vote for.

New Testament View of Tax

In the New Testament, both Jesus and Paul taught that taxes are to be paid to the government. When Jesus is asked about the legality of paying taxes he answers ‘render to Caesar the things that are Caesar’s’. In Romans 13:1-7 Paul commands the church to pay ‘taxes to whom taxes are owed’. The reason for tax is tied to the purpose of government as a whole. Government has been ‘instituted by God’ and is ‘the servant of God’ who bears the sword and ‘carries out God’s wrath on the wrong doer’. The government is also ‘God’s servant for your good’. This teaches that the government is not an independent or neutral organisation but one which has been given its purpose by God and will one day be answerable to God for how it has used its power. The government bears the sword in that it can use force. It can also take action to ‘promote the common good of a society’. The fact that the government is a servant of God and carries out God’s wrath implies that its actions ought to be in line with the teachings of the Bible. This does not mean a theocracy – the church having control of the state – nor should the state have control of the church. Reformed theology has always seen the church and government as being different organisations with different but complimentary roles to play in society. Rather it reflects the truth that God has revealed his morality by his word from creation onwards. For governments to carry out God’s wrath they need to know what angers him. They are therefore as much under the law as the people they govern. One day Christ, God’s Word made flesh, will establish his throne upon the earth where he will judge all evil and establish an eternal kingdom where perfect justice reigns. Until that day arrives good government should point ahead to the coming of Jesus by ruling justly according to the standards revealed in God’s word. Taxes are the way in which governments fund themselves for this holy task. As Calvin says, collected taxes are not to be used by rulers however they want but are rather ‘treasuries of the entire people which cannot be squandered or despoiled without manifest injustice’. Taxes should only be raised for the purposes God has ordained otherwise it is ‘tyrannical exhortation’. In twenty first century Scotland, where voters have some say over how taxes are raised and spent, Christians share a moral responsibility to try to ensure that this is being done in line with God’s purposes.

A Case for Generally Lowering Taxes

Grudem believes that voters should use their power to ensure that taxes are lowered across the board. This is based on the principle of increasing freedom and growing the economy. According to Grudem the Bible promotes freedom and choice. As the ‘largest loss of liberty by government action is through taxation,’ taxes should be cut to increase freedom. Grudem also argues tax cuts increase the economic prosperity of a nation. As taxes are cut, the economy is stimulated, there is more business growth and increased tax revenue for the government. Grudem gives an additional argument in his understanding of Genesis 1:28. According to Grudem, God’s command to humanity to subdue the earth and have dominion is fulfilled by ‘developing and producing more and better goods from the earth’. Economic growth is always morally good and should be promoted by governments.

Despite Grudem’s noble desire to see people freer and more prosperous, his arguments are not persuasive as a Christian approach to taxation. This is because his arguments are largely non-biblical. He does not base his case in scripture. After using the proof-texts noted above to show how the Bible promotes liberty, Grudem asks ‘What human freedoms should be protected by civil government?’ To which he immediately answers ‘The basic freedoms protected by the US Constitution are…’. When claiming that taxes erode freedom he recommends reading F. A. Hayek’s The Road to Serfdom. When arguing that cutting taxes will boost the economy he quotes from free market think tanks. Grudem’s supposedly biblical argument is actually firmly rooted in Classical Liberal thought. For Grudem, these arguments are so obvious that he accuses those who disagree with tax cuts as being motivated by ‘envy of the rich, or animosity toward the rich’. But he has no right to assume sinful motives from politicians and economists who disagree. Neither is it clear making the church reliant on Classical Liberalism will achieve the aims Grudem wants. Patrick Deneen argues liberalism has ignored the fundamentally relational aspect of humanity in favour of a stark individualism that is disconnected from both the state and the free market. From this perspective both the classical ‘low tax, small state’ liberalism which Grudem promotes and the progressive ‘high tax, large state’ liberalism which he condemns are two sides of the same coin. Both are based on a distorted view of humanity and liberty. Deneen is making a profound point that is supported by Biblical teaching. From the start, it was not good that man should be alone. Humans were made as communal creatures in relation with each other and with God. Any view of society and economics which denies this fact and replaces it with individualism is denying what God has created and is deeply unchristian.

Flat Tax and Inheritance Tax

If Grudem’s argument for lower taxes in general are inadequate, what about his argument for the abolition of inheritance tax or his and Sproul’s support for a flat tax based on the Old Testament example of the tithe? These appear to have some scriptural support. The tithe is described as 10% of the produce of the land for every family. Therefore to have a tax rate that varies according to income levels is unjustifiable according to the Bible. Similarly, inheritance is clearly established along family lines in Numbers 27:8-11 and as Grudem points out the ruling prince is not allowed to take any of the inheritance of his people according to Ezekiel 46:18. But Grudem’s hermeneutic seems inconsistent here when approaching the Old Testament law. Grudem argues that the law from Exodus to Deuteronomy only applied to Ancient Israel. Yet it can provide information for how we are to think about government and taxes today. In contrast other Old Testament literature is ‘not addressed specifically to the Jewish people’ and therefore can be applied more easily today. Grudem also sees the Ten Commandments as applying today with the exception of the Fourth Commandment as he views the Sabbath as representative of the entire ceremonial law which has been fulfilled in Christ. However there is nothing in this hermeneutic to say how Grudem decides which Old Testament principals he will apply in the twenty first century. Why, for example, is the law on inheritance to be literally implemented but rest days for workers are optional? 

The Reformed tradition has a more consistent hermeneutic for reading Old Testament law. The moral law contained in the Ten Commandments is still binding today. However the judicial laws expired with the ancient state of Israel and are no longer binding except as required by ‘general equity’. Equity is a legal term which recognises that the purpose of a law may be distorted if the letter of the law was to be applied in all circumstances. According to Sinclair Ferguson equity means we must ask ‘How would the law-giver apply his law in this situation?’. This moves us away from the idea that we can take a single Old Testament principle and then apply it directly today. Instead we must think in what Christopher Wright calls ‘paradigms’. The principles contained in the Old Testament cannot be separated from each other but rather must be read together as part of a coherent world view.

If we apply this to the issue of inheritance, we can understand that the reason inheritance was so important was because the land, as a gift from God showed Israel’s continued relationship of faith and blessing in the Lord. Property guaranteed each family’s access to natural resources and the ability to be economically productive. Therefore for the rulers to take anyone’s land was to take both their economic livelihood and their sign of blessing. John Frame gets close to this view when he opposes the injustice of inheritance taxes sometimes causing people to have to sell family homes and businesses to cover the cost. However, even then the parallel is not exact as the Jubilee celebration guaranteed that property would always be returned to the original family. No one could accumulate too much of the nation and property as it would be returned from them. Today we have no such reset in place and so there is no break on accumulation. As the reason for the Old Testament ban does not apply today it seems difficult to demand that Christians must oppose all inheritance taxes.

The impact of the Jubilee on tithing must also be understood. The economic system was such that there was a guarantee that everyone will be able to share in private property and there was a limit on both debt and unjust accumulation. In such circumstances, a flat tax was very fair. However, to implement a flat tax without the guarantee of everybody being able to share in the economy would be a case of picking and choosing your biblical principles.

Reviewing the evidence, we can say that a moral view of taxation is that it is necessary for the financing of God appointed governments. However, it is incorrect to claim that Christians are biblically required to support the cutting of taxes, a flat tax or the abolition of inheritance taxes. R.C Sproul’s claim that voting for certain types of tax is theft cannot be supported by biblical evidence either. However, that does not mean the intentions of Grudem and Sproul are wrong. Sproul is right to be concerned about the motives we use when deciding what policies to vote for. Grudem is also right to desire to see the tax, political and economic systems of the West reformed according to biblical standards. And Christians should pursue that goal. Once the paradigm of Israel has been examined it is clear how far short our current tax and economic system falls by comparison. God rewarded productivity and allowed people to earn wealth and luxury for themselves but in such a way that those who worked for them were guaranteed rest and proper provision. The poor in his land were not robbed of their dignity in eternal handouts. Instead, he gave them opportunities to provide for themselves by gleaning. As George Grant says, ‘Biblical charity does not attempt to smooth over economic crisis by making privation somewhat more acceptable. It attempts to solve economic crisis.’ Far from the individualism of modern liberalism, the biblical paradigm recognises both the support and responsibilities a person has with the wider community and family. 

These values do not fit easily into existing political categories. And this is ultimately the problem with the approaches taken by Grudem and Sproul. A reaction that attacks either the left as anti-freedom statists or the right as uncaring free-marketers is inappropriate for Christians. It is to think about economics and taxes along the lines presented to us by a fallen world. Instead, we must grapple with the radical biblical call to create a community where we all work in order to have something to share and that we share ourselves as much as anything else. It is only in that context that we will see something approaching the true justice of God that societies are meant to aim for.