A commentator on this blog has said:
[T]here is very little Christian theology on the merits, purposes and morality of taxes. There are certainly many mentions in the new Testament of tax collectors/publicans who were widely despised as agents of a foreign state, and ranked alongside “sinners”, which many interpret as lenders at interest, which was clearly against the Law.
St Paul does talk of the necessity to pay taxes that are due in Romans 13, but that is a teaching on the authority of government, not of taxes per se.
It is frequently argued, by those who see a Christian moral or theological basis for redistributive taxes, that modern taxation is a moral good, satisfying our duty of charity. At its extremes, this view is expressed in the claim that “the modern application of charity is by way of use of progressive taxation rates.”
This is the main method used to gain Christian support for redistributive taxation—the welfare state that the tax funds helps our neighbor and therefore its expansion must be a Christian duty.
This is contrary to Christian teaching. “At the heart of the Bible is the God who seeks the free worship of free human beings, and just as love of God is only real if it comes voluntarily from the heart, so, too, is love of neighbour. The Christian duty of charity must be undertaken voluntarily. There is no moral benefit in forced giving, as Saint Paul says: ““Each one should give what he has decided in his own mind, not grudgingly or because he is made to, for God loves a cheerful giver.””
Christians have a duty of charity to their neighbours, and are warned not to follow riches, but these are personal duties laid on each of us individually rather than collective obligations that can be satisfied through compliance with a human tax system. We cannot contract out our duties to others, nor can we nationalize them into the welfare state. Even less can we meet our duty to our neighbour by forcing another neighbour to meet his needs.
The Good Samaritan did not leave the dying man to the priest and the Levite, agents of the Jewish government, but cared for him himself.
This is, of course a libertarian, and if I might say so, evangelical view of the issue.
I fundamentally disagree with it. In a 2003 article on the theology of taxation that I wrote for the journal of the Ridley Hall Foundation I set out my case in full. I recommend the interested to read it in full.
My response to the particular issues raised are in there. I say:
For some the defence of [tax avoidance] is based on Jesus’ most commonly known teaching on tax, which was that one should pay what is due to Caesar to Caesar and what is due to God to God. Unfortunately it seems that this teaching has frequently been used as justification for the view that taxation is a secular matter which is unrelated to a person’s duty to God. In other words, if it can be technically, and however remotely, argued that a tax liability is not due, then there is no liability to Caesar. In that case it is suggested that because the duty to pay tax was only to Caesar, and not God, on the basis of this interpretation of Christ’s words, no accounting is required to the latter for any moral consequence of the action taken to avoid the tax bill (avoidance being used in this case in the context I note above). It is this dualistic approach, which suggests that as long as the law is complied with, any action in taxation is acceptable, that would appear to be used by many Christian business people to justify their actions in avoiding tax. They would not dream of using a similar argument to justify actions which are legal but nonetheless wholly unacceptable to the Christian believer, for example in the area of sexual morality. I cannot find any other basis on which many Christians (who otherwise
consider their actions ethical, and even corporately socially responsible) promote tax minimization through avoidance, as a necessary and appropriate business process.I think this view of Jesus’ teaching is wrong. If, as his other teachings make clear, it is a Christian’s duty to obey the requirements of civil authority with regard to tax, then I can see no room for such a dualistic argument based upon this one, well known, phrase. The construction of that phrase has, instead, to be seen inside its own quite distinct and separate context which had nothing to do with taxation. The result is that I cannot accept the view that transfer pricing, the use of offshore locations, and similar tax avoidance practices, are in any way consistent with Christian behaviour. These transactions and others like them are designed purely to avoid tax, contrary to the wishes of elected Parliaments, and without the necessary economic consequences of the transactions they purport to represent being suffered. The consequences occur at cost to others whom the Christian has accepted a duty to love.
Paul’s suggestion seems to coincide with this view. It is hard to believe that Paul, even though a Roman citizen, could have endorsed all the views of that regime. Yet in Romans 13: 6 & 7 he says “This is why you also pay taxes, for the authorities are ministers of God, devoting themselves to this very thing. Pay to all their dues, taxes to whom taxes are due, toll to whom toll is due, respect to whom respect is due, honour to whom honour is due.”
This too seems a reasonable interpretation of Jesus’ view. Both opinions appear quite clear and can be summarised as “pay what is asked of you”. In both cases there seems to be undoubted support for the idea of tax compliance and against those of avoidance, let alone evasion. In my opinion, this is the first essential element of a theology of taxation.
I explore other issues — including the fair rate of tax and whether it should be progressive or not (about which Rowan Williams has no doubt — he said so in the Q & A session on Monday) in the article and note that we have a:
duty to interpret the Bible in its modern context in accordance with sound hermeneutical principles.
The person who has most thoroughly and publicly offered such an interpretation in recent years is Susan Hamill, a professor of law at the University of Alabama. She has published the leading current paper in this area. In this she sought to argue on theological grounds to a state legislature with a high degree of professed Christian or Jewish members, that Alabama’s state tax code, which is both deeply regressive (i.e. rates are highest on the poor) and profoundly more expensive for the oor than almost any other state in the USA, is contrary to the ethics of Judeo-Christian teaching.
I concur with her suggestions that:
1. regressive taxation is contrary to Biblical teaching;
2. progressive taxation is consistent with biblical teaching;
3. it is appropriate that those with wealth should pay more tax than those without it.
I base these conclusions on the following:
a. Old Testament teachings make clear that those with a surplus from production (in modern parlance, a profit) should leave for the poor (in these days represented by their dependency upon the tax financed welfare state) sufficient for them to maintain themselves. This is for, example, inherent in the idea of gleaning (Lev 19:9, Deut 24: 19-22). No teaching to the contrary is ever found.
b. The teaching in Jesus’ second great commandment that we should love one another. It has been suggested by Hamill that this must, in part, be interpreted as being expressed through the provision of charity and the modern application of this is by way of use of progressive taxation rates.
c. The teaching derived from Genesis 4:9 and repeated implicitly by Jesus in considering who is our neighbour, that we are our brother’s keeper. This teaching implies that an unjust treatment to a fellow human being is a wrong committed against God. Our equality in creation places upon us a responsibility to care for each other. Hamill interprets this as a duty to pay progressive taxation since those with greater means have a duty to provide more for their fellow human beings. I agree.
d. The clear teaching in Matt 6:24 that a dedication to the accumulation of cash is contrary to devotion to God. Where a sufficiency of cash exists there is a duty to forsake wealth in favour of others if one is to answer the call of God. Again, this can, in its modern context, be seen as an endorsement of progressive taxation.
What this last teaching most clearly says, in the broader context of the teachings on prayer that immediately precede it, is that Christ must be the unambiguous centre of the life of a Christian. In that case I believe that the suggestions Hamill makes necessarily follow: progressive taxation based on the ability to pay is a fourth necessary part of a theology of taxation. We do have a duty to provide for those less well off than ourselves and in part that is expressed through accepting and paying progressive taxation.
Does the ‘charity’ argument, or Thatcher’s favoured reference to the Good Samaritan neuter any of this? No, of course it does not. #
The duty to pay tax was clear in Jewish law and in Christian teaching. The idea that the state might use that tax for much more than law and order and aggrandisement of the Emperor was unknown. But times have changed. So has society. Most ‘neighbours' in Christ’s time were literally known to the whole community in which they lived — which ere small. Tithes, gleaning and personal gifts were largely effective in ensuring the poor were maintained. That is utterly impossible now, and the rich are the poorest relative donors in our communities to compound the problem, despite the significant tax benefit to them from doing so — not shared by those less well off.
And as hermeneutics makes clear, we have a duty to interpret the Bible in a current day context — not in the context of the time it was written. If we do not we get absurd results — as some who profess to Christianity make all clear by their actions and expression of opinion. In that context charity for all the poor is not possible without a substantial centrally coordinated programme of provision clearly best run by the state and funded by tax. Anything else makes no sense at all.
And it also quite contrary to the message of Luke’s gospel. In Luke 4, starting at verse 18 Jesus says:
The Spirit of the Lord is upon me, because he has anointed me to bring good news to the poor. He has sent me to proclaim release to the captives and recovery of sight to the blind, to let the oppressed go free, to proclaim the year of the Lord's favour.
This is the clearest statement of Christian duty there is. Support for progressive taxation fulfils that duty.
If that is at personal cost — so what/ From Luke again (chapter 1);
He has shown strength with his arm; he has scattered the proud in the thoughts of their hearts.
He has brought down the powerful from their thrones, and lifted up the lowly; he has filled the hungry with good things, and sent the rich away empty.
The message cannot be clearer in my opinion: it is our duty to provide for the poor. We are to eschew riches. progressive tax as a matter of fact does that. Alternative tax methods do not. Nothing else is, therefore compatible in our time with Christian faith but progressive taxation.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
OK. Here is a little quiz: Name five products manufactured and designed under collective ownership that are sold in the non-communist world and which are are widely known and respected for their quality of design and producation, their affordability and all round quality. You know what I mean, something along the lines of the equivalent of Nokia telephones, Volkswagen cars, Heinz Baked Beans, Apple Macs, John Deere tractors, Cadbury’s chocolate and Ikea furniture.
To make things easier, I’ll start you off with Tungsram tungsten filament light bulbs and the Zeiss Jena lens business, although both were started long before they were taken over by Communits regimes.
Another 4 products can’t be so hard if it is such a good idea.
Common ownership does not mean just state ownership. Most businesses could become worker co-operatives, like the Spanish mondragon system, with ‘entrepreneurs’ who provide real value well rewarded but not taking all the cream. You do not need shareholders to provide investment, just loans to be repaid out of profits. Private, worker-owned, banks could provide these loans, but they would not be allowed to create credit out of thin air, they would have to ‘purchase’ it from the state. And you don’t need a stockmarket to provide pensions either. These should be funded from national insurance, along the lines of the junked, but very efficient, SERPS scheme. Like the Labour Representation Committee say, another world is possible.
Alex, you’re right, there aren’t many examples, but then the legal and other structures do not exist yet which would encourage such enterprises. However, the Spanish mondragons have been very successful and the John Lewis Partnership, although not quite the model envisaged, is still thriving. And it is quite possible for ownership of present companies to be transfered without any loss of productivity, with even a fair method of compensation for shareholders.
Alex
Try John Lewis
Try the Cooperative Bank – which has not needed bailing out
Try Coop farms – the biggest and some of the best in the UK
Try any coop
Try the building society movement – which showed better robustness than the banks except when subverted by management
Maybe your criteria are pretty meaningless
People don’t need what you promote
Common ownership meets more fundamental needs
You seem to want fripperies dependent on induced demand
Now which is more important?
Richard
You have no idea what I promote. People and companies buy the products I listed and I could go on for hours listing Boeing aircraft, Cisco routers, Rolls-Royce aero engines, Intel chips, Sony hi-fi, ABB turbines, Ericsson switchgear, Bosch machine tools, all of which have grown and prospered under what you call the capitalist system and they are well regarded by their competitors, their employees and the world at large. They also strive to trade profitably, but realise that one component of profitability is to treat their employees well and develop their skills and careers.
Richard: “Try John Lewis … People don’t need what you promote. Common ownership meets more fundamental needs. You seem to want fripperies dependent on induced demand.”
That seems a little contradictory, given that a significant element of the John Lewis business is the wedding list, surely one of the most blatant examples of manufactured demand.
I like co-operatives and I think they are a valuable part of the market, but magically changing the nature of the demand they service is not one of their features.
Alex sought to post further responses here but could not resist becioming both patronising and rude
His comments have been deleted
Surely co-operatives only work for relatively low tech-businesses. They are great for farmers – most of the very fine wine friom the Alsace comes via co-ops – and probably there is mileage in using them for service businesses such as law and accountancy firms (where partnership could – though rarely is – be close to a co-op) or plumbers and electricians. But how could an enterprise that is based around R&D ever be a co-op: how could a pharma, aerospace, IT company operate as a co-operative?
Would it be possible for John Lewis to come into existence now if it didn’t already exist? I suspect not, which suggests that the system that would now prevent it needs to be amended becuse John Lewis is a good thing. Though it must be noted, its client base is very middle-class: compare Waitrose to Sainsbury and see the difference.
But to go back to the co-op model generally, forany R&D intensive company surely at some point they need to float off equity to get the capital to fund the research?
mad foetus, I think you make some valid points.
If a serious assessment of the co-operative model is to be made, I feel a clear distinction needs to be drawn between consumer co-operatives (such as building societies and most of what are considered co-ops in the UK) and worker co-operatives (such as John Lewis), because they have very different dynamics.
In any given market, the consumer and the worker have broadly opposing aims. The consumer generally wants to obtain the maximum amount of product for the lowest price, whereas the worker wants to obtain the highest price for the least amount of work. The different types of co-operative reflect those opposing interests.
For me, where the Marxist approach to co-operative style production fails most severely is that it puts the worker at the heart of the analysis and gives little regard to the interests of the consumer.
What PaulL fails to appreciate in this dog-eat-dog world which he perceives, is that workers are consumers. Man is a co-operative animal and can achieve much more through co-operation than conflict.
Carol Wilcox : “What PaulL fails to appreciate in this dog-eat-dog world which he perceives, is that workers are consumers. Man is a co-operative animal and can achieve much more through co-operation than conflict.”
Oh dear. I really thought you could do better than that, Carol, particularly in the context of a thread where I’ve been taking a fairly pro-co-operative position.
There is no need for this false dichotomy of dog-eat-dog versus pure altruism. Yes, man can achieve more through cooperation than conflict, which is precisely why we do it! We seek out those arrangements where we can work with others for our mutual advantage. Voluntary co-operation in an endeavour produces a personal gain and I don’t see that as something evil. That’s why people formed co-operatives in the first place – to improve their circumstances.
Yes, workers are also consumers, but we wear each hat at different times and introducing compulsion in any particular interaction in order to give an advantage to one of the participants doesn’t aid co-operation, it destroys it. To me, one of the fundamental features of co-operation is that it is done voluntarily.
I’m intrigued; what are your feelings about consumer co-operatives? I get the impression that you have a distaste for them because they violate the idea of worker ownership and control.
@Richard Murphy
I’m not sure economics is a faith system. It was one of the defining moments in the development of micro-economic theory when it was demonstrated how it is possible for a market led price system to determine prices; and there have been some specific and interesting developments since, not least in the areas of econometrics and chaos theory. If you can get past your hang up with the ideas underlying efficient market hypotheses, and engage in deeper study you might find out that a) economics is capable of theories that enable prediction, and thus which are capable of being tested, and b) there is no inherent contradiction between science and faith.
In the real world such cooperation is usually more properly described as collusion – and there are good reasons why it is considered a bad thing. Cooperation where people are free to chose is always preferable. The price mechanism is incredibly democratising 🙂
@Paul Lockett
“… introducing compulsion in any particular interaction in order to give an advantage to one of the participants doesn’t aid co-operation, it destroys it.” This is where we part company. I want workers to receive the fruits of their own labour, less their contribution to state finances. I don’t see why they need to share it with consumers or shareholders. If I had to choose between the latter two I would, of course, prefer consumers above shareholders.
@alastair harris
Your form of democracy – where the rich get many more votes, I note
Which makes your claim complete nonsense
“Your form of democracy – where the rich get many more votes, I note”
What nonsense, where did Alastair ever say that.
What I suspect he was referring to is the striking historical fact that the rise of democracy in every country has always been accompanied with freer markets. Name me a country or period where the advent of democracy was associated with more state control.
Carol Wilcox: “This is where we part company.”
Unfortunately, I think so. Somebody who believes that a consumer co-operative is an unacceptably exploitative arrangement has a viewpoint which is so extreme and anti-co-operative that I can’t see any way of finding significant common ground with it.
Paul, I’m not that dogmatic. If workers owned their own labour it would be rational for some businesses to share profits with consumers, but this would be their choice.
Unless there is slavery, workers do own their own labour. The only extent to which they don’t own their labour is the amount which the are required to hand to the state, which you seem perfectly comfortable with. Other than that, a worker is at liberty to decide how he or she applies his or her labour.
Your comment that some businesses might choose to share profits with consumers implies that a business cannot possibly be owned by the consumers. It’s another re-statement of the anti-consumer co-operative position I was highlighting.
@Richard Murphy
OK – youve lost me on this one. Perhaps you might try to explain where you are coming from
Paul, you are wrong, under capitalism workers’ surplus labour (the value of work people perform over and above that for which they are paid) is appropriated by, among others, shareholders. You may say that workers are free to form their own co-operatives, but, as I have said, there are no structures to support this nor education to show how things could be. This is, of course, basic marxism.
@Paul Lockett
Paul, I am not sure the extent to which many workers really do own their own labour in a way that gives them the sort of options implied. Of course, highly skilled workers, whose skills are scarce are in the position you describe. Those whose skills are more limited and common generally have to take what they can get, in order to keep body and soul together. A marxist would refer to “wage slavery”. I am not a marxist, and I think such a term is an exaggeration, but it is certainly the case that many workers are unable to decide how they apply their labour, except within the tightest of confines.
Isn’t Carol a LVT advocate, in which case she would presumably be against taxes on labour?
Carol: “Paul, you are wrong, under capitalism workers’ surplus labour (the value of work people perform over and above that for which they are paid) is appropriated by, among others, shareholders.”
I don’t know how to respond to the term “capitalism” because it seems to be a pejorative term, which, as far as I can tell, doesn’t actually mean anything other than “as things are now.” As I don’t think things as they are now are particularly great, I’m not about to defend the status quo.
Of course, currently, somebody other than the person performing the physical labour at a given point may enjoy some return from that work, but, in order to prevent that, you have to deny others the right to the value of their labour.
I get the feeling that, under a Marxist system, the worst position to find yourself in would be that of someone who is an expert tool maker, but a terrible carpenter: You spend time and effort producing wonderful saws, chisels and hammers, only to find that, when you go out to find a good carpenter willing to buy or hire them, you’re denounced as an evil capitalist trying to control the carpenter’s means of production and you have your tools taken from you.
Capital is a product of labour. If I can’t control that product, then I can’t control the product of my labour.
James, I campaign for tax justice, including the collection of land value for public benefit. Unfortunately many ‘georgists’ appear to have no other economic/social context. I see LVT as part, an essential part, of a good tax system, since it is in fact the only tax which meets all criteria for a good tax.
However, I have no delusions that all public goods and services which should be provided by a rich economy like ours could be funded by the proceeds of even 100% LVT (based on rental, not capital value). Even under a common ownership system there would be those who are able to command huge rewards for their labour and these should of course be subject to income tax. Since nearly all taxes, especially those on capital, can be avoided I fully support TJN’s campaign against secrecy jurisdictions.
I must say that I find it very difficult to understand why the Compass report, which Richard has joint-authored, has nothing to say about property taxes, which after all are difficult to avoid, except to endorse Cable’s ‘mansion tax’. Council Tax is just about the most regressive tax there is, not much better than the Poll Tax. IPPR, joint authors, have endorsed LVT in the past and Compass has only recently published an excellent article on housing and LVT.
The Labour Land Campaign manifesto (labourland.org) shows how annual LVT could replace Council Tax, Business Rates, Stamp Duty Land Tax and Income Tax for those on average incomes (i.e. fund all of local authority expenditure plus) in a fair and efficient way, by vastly increasing the tax base.
I guess the problem is that LVT campaigners just do not have the resources to get their voice heard. Yet it is a fact that several very well endowed foundations are committed by their founders to promote LVT, including the Joseph Rowntree Foundation and, in the US, the Lincoln Institute and the Robert Schalkenbach Foundation.
Common ownership? We don’t need to change ownership; we merely need to start collecting a larger share of the economic rent on land.
There is a school of thought which says that the Old Testament land laws functioned to create a just and stable economy with a large middle class, and that the collection of land rent for the purposes of funding common spending is equally do-able today. Further, I’ve heard the “render unto Caesar” statement interpreted to mean that land rent was collected for local purposes, and that since Caesar was not part of that local community, what was due to Caesar was … NOTHING!
If we predistribute that which nature provides, and that which the community creates through its investments (infrastructure, services, etc.), treating everyone as equal, we are highly unlikely to have poverty that requires relief. Some would say to that that Jesus declared there would always be poverty, and therefore it would be wrong to structure ourselves to prevent poverty. I am more persuaded that Jesus was saying that his listeners would have time later to do something about poverty, but little time to be with him in the flesh.
You might take a look at a wonderful essay by Bob Andelson, entitled “Henry George and the Reconstruction of Capitalism.” It speaks to what is rightly private property, and what is rightly common, or socialized. You’ll find it online at wealthandwant.com, among other places.
Some here might also appreciate that site’s less developed sibling, at whatwouldjesustax.com
Thanks, LVTfan, but I think Marx was at least George’s equal when it comes to economic analysis, but neither had all the answers for today’s world.
Capital goods (which are the only real representation of the factor of production which you call capital) are not human and therefore cannot earn their return (interest, in classical economics). There is no necessity for saving to precede investment. Workers can borrow to purchase capital goods to produce and make profit, which can then be reinvested.
Carol: “Workers can borrow to purchase capital goods to produce and make profit, which can then be reinvested.”
So, under the system you propose, I would be forbidden from hiring tools from the person who made them, instead being required to take on debt in order to finance their outright purchase before being able to use them?
Paul, I said ‘can’ not ‘must’. You really are being tedious.
I’m sorry you feel that way. I’m just trying to establish exactly what it is that you are proposing. On one hand, you seem to be suggesting a situation where the only permissible business structure would be one of worker ownership, but on the other hand, with comments such as this one, you seem to suggest that you would allow consumer co-operatives to exist.
Maybe I should be a little more direct with my questions.
In your ideal system, would any business structure other than worker ownership be permitted to exist?
OK, what about a regulation that any enterprise with 30+ workers should be employee owned? This does not prevent small businesses from operating as they do now. With good employment prospects I would assume that most would prefer not to share their surplus labour.
Carol Wilcox: “OK, what about a regulation that any enterprise with 30+ workers should be employee owned?”
So, at a stroke, you would outlaw:
-The Co-operative Bank
-Building Societies
-Larger Credit Unions
-Co-operative Insurance
-Co-op Supermarkets
-Co-op Travel
-Mutual Insurance
Essentially, the whole of the co-operative movement would be declared illegal. I think the co-operative movement is one of the nations great success stories and something to be proud of. I’d need a very, very good reason to even begin to consider its prohibition.
Paul
I guess I could leave you and Carol to slug this out forever
But candidly you are proving yourself to be a boring pedant with no contribution of worth to add to debate – like Worstall et al
So I am drawing his debate to a close
Richard