A Pastor’s Response to the State of the Union Regarding Taxes3
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Last night President Obama called for increasing the capital gains rate on couples making more than $500,000 annually, to 28%. The President’s tax plan would also require estates to pay capital gains taxes on securities at the time they’re inherited and slap a fee on the roughly 100 US financial firms with assets of more than $50 billion.
Much of the $320 billion in new taxes and fees would be used for measures aimed at helping the middle class, including a $500 tax credit for some families with two spouses working, expansion of the child care tax credit and a $60 billion program to make community college free (information obtained from Julie Pace of the Knoxville News Sentinel – Jan. 21, 2015).
“Will we accept an economy where only a few of us do spectacularly well? Or will we commit ourselves to an economy that generates rising incomes and chances for everyone who makes the effort?”
Regarding taxes, the Bible tells us that Government has a right to collect taxes to carry out its responsibilities. It is the duty of citizens to pay taxes (Romans 13:7; Mark 12:17).
But, should wealthier people pay a higher percentage in taxes than others?
Obama has and is continuing to propose this. Based on the explicit patterns of taxes and tithes found in the Bible, there is no justification in the Bible for a ‘progressive’ tax rate, taxing one class more than another.
Although we are not living in Old Testament times, we can still learn a lot from how the nation of Israel did things under God’s rule.
There were examples of taking care of the poor (Lev. 12:18; 23:22; 25). Also, the land was not private property to be bought and sold (Leviticus 25:23). One example gave a provision for someone who earned a very small amount of income to pay only a small amount of tax (Lev. 23:22). The important thing to note here is the person still paid a tax.
People were required to pay a tithe in Israel (Deuteronomy 14:22-23; Leviticus 27:30-32). This system was like a flat tax where everyone paid the same percentage. When an extra census tax ('head tax') was given, each person had to pay the tax in the amount of half a shekel (Exodus 30:13-15).
I'm concerned with the President's proposals of taxing the wealthy more, at an unfair rate.
Some people may ask, “Isn’t it fair for the rich to pay a higher percentage?”
Wayne Grudem says:
“On what basis can we decide what is fair? People may have subjective preferences or emotional preferences for one rate or other being ‘fair’, but those preferences will often be influenced strongly by self-interest rather than by some objective standard of fairness.”
Grudem goes on to give an example of a ‘flat tax’ (where everyone pays the same %)…
Taxpayer A pays 20% of $50,000, equaling $10,000.
Taxpayer B pays 20% of $500,000, equaling $100,000.
It would be easy for Taxpayer A to think Taxpayer B should pay even more taxes because he still has more money left to live on. The assumption is that Taxpayer B for some reason does not deserve to have $400,000 left to live on. Taxpayer A would assume a superior moral judgment.
“But the question then must be asked, how do we decide what someone deserves? Do we really believe everybody somehow deserves the same amount of money to live on in the end? There is a far better solution to the question of what each person ‘deserves.’ The solution is: Each person deserves what he has legally and fairly earned in each year (Luke 10:7; I Corinthians 3:8; Luke 19:13, 17).” - Wayne Grudem (Politics According to the Bible - pp. 285-209).
We can learn a lot from the Bible about what is right and fair.