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God's Money Newsletter

April, 2008  Vol. II - Issue IV 

Steve Scalici, CFP

Past Issues

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TAX INTEGRITY

Normally, people save the best for last.  But, I decided I would save the worst for last in this five part series on the five uses of money.  We conclude this series by talking about taxes.  While I understand the Biblical mandate for paying taxes and obeying authority, I still don't like it.  Of all the things we can do with money (spend it, save it, give it, pay off debt, and pay taxes), paying taxes is definitely my least favorite (with paying debt a close second).  But, at least when I pay off debt, there's a chance I may have had at least a little fun getting into debt.  Plus, there is an end with paying off debt.  I can set a goal and become debt free.  I've heard it said that taxes are like a marriage:  till death do us part.  But, even in death, sometimes families have to pay estate or inheritance taxes.  So I guess it's not like a marriage, which is good because I know I wouldn't want to be in a marriage like that. 

In Matthew 22:17-21, the Pharisees asked Jesus a question, "Now tell us what you think about this: Is it right to pay taxes to the Roman government or not?"  But Jesus knew their evil motives. "You hypocrites!" he said. "Whom are you trying to fool with your trick questions? Here, show me the Roman coin used for the tax." When they handed him the coin, he asked, "Whose picture and title are stamped on it?"  "Caesar's," they replied. "Well, then," he said, "give to Caesar what belongs to him. But everything that belongs to God must be given to God." 

Not to be outdone, the Apostle Paul wrote this: "Pay your taxes, too, for these same reasons. For government workers need to be paid so they can keep on doing the work God intended them to do. Give to everyone what you owe them: Pay your taxes and import duties, and give respect and honor to all to whom it is due."  (Romans 13:6-7)

Federal income tax, state income tax, local income tax, sales tax, property tax, personal property tax, capital gains tax, gas tax - the list could go on and on. Research tell us that in the United States, April 15th, tax day, is one of the most stressful days of the year.   Interestingly, the average American works until April 30th just to pay their taxes1.  Everything you earn from May 1st to December 31st is yours to keep.

It is for these reasons that the Internal Revenue Service is probably the most despised government organization. Similarly, tax collectors were not thought highly of in Bible times (Matthew 11:19; 21:31-32; Luke 3:12-13).

But, even though we dislike paying taxes, the tax system often seems unfair, and there are far better things our money could go towards - the Bible commands, yes commands us to pay our taxes. Romans 13:1-7 makes it clear that we are to submit ourselves to the government. The only instance in which we are allowed to disobey the government is when it tells us to do something the Bible forbids. The Bible does not forbid paying taxes. In fact, the Bible encourages us to pay taxes. Therefore, we must submit to God and His Word - and pay our taxes.

The most frequent objection to paying taxes is that the money is being misused by the government or even used for evil purposes by the government. We can work to change those things but in the meantime, we should pay our taxes. When Jesus said, "Give to Caesar..." the Roman government was by no means a righteous government. When Paul instructed us to pay taxes, Nero, the most evil Roman emperor in history, was the head of the government. We are to pay our taxes even when the government is not God-honoring. 

So, what about tax deductions?  We are free to take every tax deduction that is both legal and honest. We do not have to pay the maximum amount of taxes possible. If the government allows you a tax break - take it. If there is a legal way you can shelter some of your money from being taxed - shelter it. By all means, take the deduction for your children, your mortgage, retirement contributions, charitable donations, your moving expenses, etc., etc. Again, feel free to take every legal and honest opportunity to reduce your tax burden. However, illegal and/or dishonest methods must be rejected. Romans 13:2 reminds us, "Consequently, he who rebels against the authority is rebelling against what God has instituted, and those who do so will bring judgment on themselves." 

If you are really fed up with paying taxes, don't cheat.  Consider ways to change the system.  There is a wonderful organization called Americans for Fair Taxation and they have a website called www.fairtax.org.  They have some interesting ideas for revamping our tax system.  I highly recommend you check it out.  Even if you end up not agreeing with their proposal, it will give you some insight into some possible solutions.

(1) http://www.taxfoundation.org/publications/show/93.html

Tax Freedom Day® will fall on April 30 in 2007, according to the Tax Foundation's annual calculation using the latest government data on income and taxes. 
 

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The views expressed by the author are not necessarily those of INVEST Financial Corporation.

Registered representatives of and securities, advisory services and insurance are offered through INVEST Financial Corporation, member FINRA/SIPC, a federally registered investment advisor and affiliated insurance agencies.  INVEST is not affiliated with Treasure Coast Financial 


We hope you enjoy the new version of the monthly e-letter.    If you have any comments, please e-mail me at steve@tcfin.com
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©2007 Steve Scalici
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