About Taxes
by Christopher Dodson
Executive Director
North Dakota Catholic Conference
March 2008

Spring arrives with warmer days, melting snow, and taxes. Let us pause from removing mud and preparing tax returns and reflect on what the Church has to say about taxes.

We often hear that taxes are just the government’s way of taking our money. Working with a starting principle of “no more taxes than needed” makes sense. It reflects a philosophy of good stewardship by policymakers. Too often, however, this principle is distorted into the belief: “it is my money.” Catholics should resist this temptation. The Church has taught for centuries that no one has an absolute ownership over anything, including his or her earnings. John Paul II reminded us in Evangelium Vitae, that this false sense of ownership is one of the roots of the culture of death.

Although lengthy, the purpose of taxes described in the Compendium of the Social Doctrine of the Church is worth quoting.

“Tax revenues and public spending take on crucial economic importance for every civil and political community. The goal to be sought is public financing that is itself capable of becoming an instrument of development and solidarity. Just, efficient and effective public financing will have very positive effects on the economy, because it will encourage employment growth and sustain business and non-profit activities and help to increase the credibility of the State as the guarantor of systems of social insurance and protection that are designed above all to protect the weakest members of society.” (No. 355.)

As Christians, we have obligations toward the common good. For that reason, we have a duty to pay taxes. Jesus did not consider it unjust to pay taxes to Caesar. (Mk 12:13-17; Mt 22:15-22; Lk 20:20-26) Saint Paul insisted on the civic duty to pay taxes. (Rm 13:7) The Catechism says: Submission to authority and co-responsibility for the common good make it morally obligatory to pay taxes . . .” (Catechism, No. 2240.)

Understandably, cheating on your taxes and evading taxes is wrong. Not only does it violate the Seventh Commandment against stealing, but it also violates the Eighth Commandment against bearing false witness.

For its part, government has an obligation to ensure that the tax system conforms to principles of justice. Specifically, three conditions must exist. First, the collection of taxes must be reasonable and fair. Second, there must exist precision and integrity in administering and distributing public resources. Third, public spending must be directed to the common good.

The Church does sanction any particular system as “fair and reasonable.” Moral theologians and economists guided by Catholic teaching that examine the issue usually conclude that a progressive tax system comes closest to meeting the requirements of justice. In a progressive system, like our income tax, people pay in proportion to their ability to pay. It is generally accepted that a regressive system, like a sales tax, is the least just because the poor end up paying a higher proportion of their income.

A fair system alone, however, does not make a tax system just. How the government expends the public revenues is just as important. There always exists the preferential option for the poor. In addition: “In the redistribution of resources, public spending must observe the principles of solidarity, equality and making use of talents. It must also pay attention to families, designating an adequate amount of resources for this purpose.” (Compendium, No. 355.)

Coming from another Christian perspective, the Protestant evangelical law professor Susan Hamill has recently concluded a study of the tax systems in every state, looking to how they stand up to “biblical” principles of justice. Notably, she looks not only at how taxes are collected, but also at how they are spent and at how the entire system impacts the poor.

“Tax season,” therefore, really extends well beyond April 15. It includes the election of those responsible for the system. It extends into the legislative session next winter, when our representatives will decide not only how much to tax, but also how to distribute the collections.