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Taxation in the Bible

Gary North
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There is no discussion in the Bible of the proper limits of taxation. Taxation should therefore be discussed in terms of achieving other biblical goals and enforcing other biblical principles.

The supreme biblical goal of taxation is to finance a civil government that is incapable of doing more than the Bible says it should. If it is capable of doing more, it will. This is basic to fallen man: to be as God (Gen. 3:5). The state should be limited in a way analogous to the limits placed on the king in Deuteronomy 17. So, the biblical goal of modern politics is to shrink the state -- all branches -- to levels consistent with the biblical concept of civil government: negative sanctions only. The welfare state must be de-funded.

Taxation therefore should be discussed, above all, in terms of limiting the expansion of the state, especially the central government.

R. J. Rushdoony argued that Exodus 30 -- a man's payment of half a shekel upon reaching age 20 -- was a head tax. He was incorrect. The payment went to the priests, not to a civil magistrate ("captain"). The tip-off was that it was calculated as a shekel of the sanctuary, which was a separate, ecclesiastical coin. This was blood money. It was paid on a man's entry into God's holy army, which was both priestly and civil. I discuss this in Chapter 32 of Tools of Dominion: The Case Laws of Exodus (1990).

What about the income tax? Is it biblical? The principle that civil government should tax income was honored by Egypt under the Pharaoh (20% -- a tyranny: Gen. 47) and Israel's kings (10% -- a tyranny: I Sam. 8:14, 17). There is no other mention of the income tax in the Bible. Conclusion: tyrannical governments prefer to tax income.


One supposed limitation on the central government is the structure of federalism: maintaining local political sovereignties. It has not worked, because federalism has been undermined.

In the United States, it was undermined by not placing enough limits on the Supreme Court. For example, the other branches of the national government should have a veto over the Court: the signature of the the President and a three-quarters vote of each branch of Congress.

Federalism was also undermined by the results of the Civil War: political and judicial centralization.

Finally, it was undermined by its claim (false) that the voters had ratified the 16th amendment to the Constitution in 1913, authorizing a Federal income tax. In Great Britain, this came in 1911. World War I (1914-17) solidified taxation at levels far more oppressive than the Pharaoh of Egypt collected.

The Articles of Confederation (1781) had the correct approach: no taxation of individuals by the national government. It was this that Alexander Hamilton correctly saw had to be overturned in order to establish an American empire, which he wanted to achieve. He argued explicitly that the central government needed far more money. He argued in Federalist 12 in favor of import taxes and taxes on liquor because they would be easier to collect than taxes on farmers. He argued, therefore, not for a principle of limiting national revenues, but rather for the central government's greater ease of tax collection in order to increase its revenue. From that day until this, most American politicians have adopted this principle of taxation: ease of collection.

The Constitutional Convention of 1787 was a conspiracy against the concept of a limited central government. In justifying the proposed Constitution against constitutionally decentralized political power (the Articles), Federalist 30 through 36, all written by Hamilton, promoted the concept of the central government's concurrent taxation of the people, along with the states. This was what the Articles prohibited in order to make difficult the creation of a centralized empire. This had to be overturned in order to create a new empire, which Hamilton favored. It was, and it did.

So, a practical application of biblical civil government is this principle: no concurrent taxation. Each level of civil government above the local must tax only that level of government beneath it. Tax increases above the local level of civil government must come at the expense of intermediate civil governments -- politicians and bureaucrats -- and not at the expense of the people.

The first and most important goal of taxation is to see to it that only a local government taxes people and businesses directly. This keeps higher levels of government out of the pocketbooks of residents. If a business does business inside a local jurisdiction, it pays a tax locally. This is why a sales tax is ideal. A business collects the sales tax from local residents and sends the money to that jurisdiction.

Biblical principle of taxation: Every higher level of civil government must tax only the next lower level. No tax should be paid directly by residents to any level of civil government above the city or county, whichever local voters have chosen as the originating tax jurisdiction under which they live. All higher levels must tax only the next lower level. The Federal government taxes the states; the states tax the counties; the counties tax cities or county residents.

Implementation: A flat rate income tax at this level is not prohibited biblically, just so long as it does not reach the 10% level (I Sam. 8:14, 17). However, it is unlikely politically to remain biblically restrained. Voters will seek to tax higher-income residents at a higher rate: a denial of the rule of law (Ex. 12:49). A sales tax is much better for both personal privacy and judicial equity: an inherently flat tax. Everyone pays the same. A sales tax also does not tax capital and profits, which in turn spurs investment and economic growth.

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