ISSUE: What the Bible says about taxes.
BACKGROUND: The deadline for filing income tax returns is approaching, and while the impact of the recently passed tax reform law will not affect this year’s filing, it is already affecting this year’s earnings. Perhaps it may be interesting to review what the Bible says about taxes and correlate it with both current and future tax law comparisons. An article entitled “The Bible and Taxes”, on the “WallBuilders” website and accessed via https://wallbuilders.com/the-bible-and-taxes/, on 03 March 2018, provides the comparison of the current tax law to what the Bible says about taxes. To maintain currency with the recently passed new tax law, a series of articles collectively entitled “The New Tax Law”, published as Section R in the Wall Street Journal on 14 February 2018 was referenced.
DISCUSSION: Of the many forms of taxation, those on profits, on earnings, on wages, and on estates impact both Christians and non-Christians alike. Last year, this same spiritual growth point looked forward to potential tax reform that has since been passed into law. This year, where relevant, the impact of the new tax law as it relates to the previous Biblical reference is provided. None of the information below is intended to supplant qualified tax advice and consult yet it is still prudent to go to the one constant source for wisdom: His Word.
The capital gains tax, a tax on profits, penalizes a person for success by exacting payment for increased profit. Conversely, in the Bible there is more reward for more profit. The parable of the minas in Luke 19:12-27, and the parable of the talents in Matthew 25:14-30 both conflict with the notion of a tax on capital gains. From the parable of the talents, Verses 27-29: “Well then, you should have put my money on deposit with the bankers, so that when I returned I would have received it back with interest. ‘So take the bag of gold from him and give it to the one who has ten bags.’” Thus, the Bible implies that those who do well (e.g. invest) with what they have will be given more. Regarding captial gains, in the new tax law, “…rates and brackets are similar to those in effect for 2017.”
The parable of the landowner and laborers in Matthew 20:1-16 is applicable to the employer/employee relationship and the issue of wages. “But he answered one of them, ‘I am not being unfair to you, friend. Didn’t you agree to work for a denarius? Take your pay and go. I want to give the one who was hired last the same as I gave you. Don’t I have the right to do what I want with my own money? Or are you envious because I am generous?’” James 5:4 offers additional insight: “Look! The wages you failed to pay the workers who mowed your fields are crying out against you. The cries of the harvesters have reached the ears of the Lord Almighty.” The current income tax structure is highly progressive and mandates a higher tax rate or percentage the more a person makes. Since the wages an employer can pay, and the wages an employee receives are affected by taxes, connections to tax law can be made. Changes in payroll witholding stemming from the new tax law “began to show up in early February”. While changes to paychecks do not directly reflect what a taxpayer will owe for the tax year, the Tax Policy Center estimates that the percentage of filers with a tax cut will be “80% compared to an estimate of 5% with a tax increase in 2018”.
The Biblical tithe is not applied progressively, for as stated in Leviticus 27:30-32, “‘A tithe of everything from the land, whether grain from the soil or fruit from the trees, belongs to the Lord; it is holy to the Lord. Whoever would redeem any of their tithe must add a fifth of the value to it. Every tithe of the herd and flock—every tenth animal that passes under the shepherd’s rod—will be holy to the Lord’”. A tithe is essentially regarded as a charitable contribution within tax law. Of note, within the new tax law, the Tax Policy Center expects only “16 million filers to take adavantage of the deduction for tax year 2018, down from 36 million for tax year 2017.” This reduction stems from the fact that the in the new law, the standard deduction level is nearly doubled. For charitable donors a tax break may be realized with the ability to “‘bunch donations every few years” or to use “so-called donor advised funds” which enable donors to ‘bunch’ smaller gifts into one large amount.
The Bible speaks to the issue of inheritance numerous times. Ezekiel 46:18 states, “The prince must not take any of the inheritance of the people, driving them off their property. He is to give his sons their inheritance out of his own property, so that not one of my people will be separated from their property.” The current estate tax can take up to 55% of an estate, leaving 45% to the children; when those children pass it on to the grandchildren, up to 55% of the remaining 45% can be taken, leaving only 27%
of the original able to be passed on to the following generation. Appearing to move in the right direction, the new tax law, will reduce the number of estates to which the tax will apply. “According to estimates by the Tax Policy Center, about 1,700 estates are expected to owe that tax for 2018 out of about 2.7 million U.S. deaths. For 2017, an estimated 5300 estates owed the tax.”
Of course, once a tax becomes law, the Bible again provides clarity in the Gospels; here within Luke 20:20-26 is cited: “Is it right for us to pay taxes to Caesar or not?’ He saw through their duplicity and said to them, ‘Show me a denarius. Whose image and inscription are on it?’ ‘Caesar’s,’ they replied. He said to them, ‘Then give back to Caesar what is Caesar’s, and to God what is God’s.’ They were unable to trap him in what he had said there in public. And astonished by his answer, they became silent.” From Matthew 17:24-27, we learn that Jesus paid tax. Jesus, who as the Son of God would have been exempted from paying the temple tax, agreed to pay the tax not because he owed it but because he did not want to cause offense. From Luke 2:1-5, we learn that Joseph, described in Matthew 1:19 as “a righteous man,” traveled about 70 miles from Nazareth to Bethlehem with a nine-month pregnant wife, on foot and donkey, to “register” and thus pay his taxes. The Bible also supports the law of tax exemption for work done in service to God. The decree of the Persian King Artaxerxes is recorded in Ezra 7:24 and states, “You are also to know that you have no authority to impose taxes, tribute or duty on any of the priests, Levites, singers, gatekeepers, temple servants or other workers at this house of God.”
As our government officials are faced with what to do about policies and regulations that impact citizen consumers, let us pray that they would consider the Bible as a source of wisdom.
SPIRITUAL GROWTH POINT: In addition to the verses cited above, what does the Bible say about this topic?
“Speak to the Levites and say to them: ‘When you receive from the Israelites the tithe I give you as your inheritance, you must present a tenth of that tithe as the Lord’s offering.” Numbers 18:26
“So now I charge you in the sight of all Israel and of the assembly of the Lord, and in the hearing of our God: Be careful to follow all the commands of the Lord your God, that you may possess this good land and pass it on as an inheritance to your descendants forever.” I Chronicles 28:8
“For Scripture says, “Do not muzzle an ox while it is treading out the grain,” and “The worker deserves his wages.” 1 Timothy 5:18
There will be a new Spiritual Growth Point every month. This Spiritual Growth Point is brought to you by the Men of Grace and was compiled by the Spiritual Growth Committee including Brian Repp, Paul Tucker and Eric Rosenlof who serve as a part of the Men’s Ministry led by Joel Prell.