Ethical Teachings of the Torah

THE CHALLENGE OF MONEY - Funding Social Costs - Taxation [1]

Right from the outset of the nation’s birth, Jewish societies developed a ramified system of taxation to meet society’s needs that has reflected Judaism’s social, ethical and religious values. Throughout the centuries, whether Jews lived in an independent state in Eretz Yisrael or whether they existed only as scattered communities in the galut, translating these values into reality necessitated a viable source of public funds and therefore a tax system. This system, like any other fiscal system, requires decisions regarding the rates imposed, the basis of assessment, the exemptions allowed, punishment for tax evasion, and a legal structure that will adjudicate between the conflicting claims and interests of the individual and the group. As the Jewish economies became more complicated and sophisticated so too did these mechanisms, but the value structure and ideology remained the same. Irrespective of the methods chosen to finance communal needs and the size of the budget, taxation was an accepted religious manifestation of the rights of the community in the property of the individual and the right to punish evasion of communal obligations.
This was enshrined in all the Halakhic Codes and its application in real life is amply demonstrated in the extensive Responsa literature on the subject - but no less in the records of the kehilot throughout history in all the countries of the galut.
The Jewish kehilot had the whole range of tax assessors, auditors and enforcement necessary for the implementation of their tax system. It was only the transformation of the kehilot into voluntary religious associations in the 19th and 20th centuries parallel to the surrounding non-Jewish societies, which broke down the Jewish fiscal system. However, today its principles have relevance for the individual Jews in the golah through their participation in their democratic host societies, while these principles are a major religious challenge to the independent Israel and to the Jews living here.
While bearing in mind that halakhic sources are not interpersonal relation- ships, economic or social manuals, but rather spiritual and moral guides intended to regulate, and so to sanctify, human actions, it is possible to discern certain basic ethical principles in the halahkic approach to taxation:
The Jewish lay authorities, under halakhic supervision, could theoretically levy taxes for whatever purposes they saw fit or reduce the tax burden by curtailing services. Nevertheless, funding for certain purposes could not be refused. Financing from public funds for Torah education for the young, feeding, clothing the impoverished, care of widows and orphans, and pidyon sh’vuyim were sacrosanct. Similarly, building the essential number of religious institutions [shuls, cemeteries, mikvaot] was an obligation not an option.
Taxes are to be allocated justly and equitably, according to a formula that will be discussed later;
Taxes may not be confiscatory; this precludes taxes on wealth that does not generate income;
Levying of taxes has to be according to decisions of the majority or their representatives, notwithstanding the cases where minority interests were also to be protected;
Taxes may not be levied twice on the same income. This may preclude the double taxation on profits prevalent today in most countries whereby the firm is taxed on its profits and the shareholders on their dividends from that same profit. It would also prevent double taxation on wealth earned in one country by residents of another;
In all cases of conflict the usual dictum of, ‘the claimant has to prove the debt claimed’, applies;
Certain classes were exempted from taxes or entitled to reductions. These exemptions reflect the Jewish value structure, for example they include Torah scholars, the poor or those making aliyah. This was subsidizing the performance of mitzvot;
Tax evasion is tantamount to theft, either from other taxpayers who have to pay more or from the recipients of tax funds for who there now would be less schooling, welfare, protection etc. Full power of the community and its halahkic authorities were brought against evaders.
Studies have shown that it is a society’s value structure, not the high rate of taxation that determines the degree of tax evasion or of compliance with the demands of the tax authorities. The continuation throughout history of this Jewish fiscal system demonstrates that there was indeed an acceptance of this Jewish value structure.

Dr Tamari’s new book - “Truths Desired by God: An Excursion Into the Weekly Haftarah” is published by Gefen Publishers

• Other Ethical Teachings of the Torah
• Today is the Birthday of the World, whether as Children or as Servants [2] by Dr. Meir Tamari
• Funding Social Costs - Taxation [2]
• "Why the Land was Destroyed (Nedarim 21a): The Cycle of National Disasters [3] by Dr. Meir Tamari