What the Bible has to say about Taxes, Public (Government) Debt, and Inflation

Taxes

Various taxes appear to have operated in Israel, but the most significant and divinely ordained general tax was probably the tithe (a tax of 10%). This was essentially a flat rate form of income tax (Lev 27:30-33; Dt 14:22ff).

In Solomon�s time, despite huge revenues from trade, the royal palace needed further revenues. A system of taxation was set up which included the areas controlled by the various Northern tribes, but not Judah and Benjamin (1 Ki 4:7-19). Jerusalem was located in Judah who thus escaped paying taxes for the activities of the palace, of which they would be the most direct beneficiaries. This differential treatment reflected the tribal divisions that David had faced (2 Sam 3:1; 5:1-3; etc.).

On Solomon�s death, his son offered the Northern tribes no relief and they rebelled. The kingdom was divided from that time, the Bible dating the rebellion from the stoning of the king�s tax collector (1 Ki 12: 18-19; 2 Ch 10:18-19). Thus, funding the government of the nation instead divided and destroyed it. Unfair taxes were also levied at other times (e.g. the grain tax in Amos 5:11).

Debt

Debt is undesirable, for �the borrower is servant to the lender� (Pr 22:7). Whilst David amassed savings toward the cost of building the temple (1 Ch 22:14), Solomon amassed debts from the cost of building his palace. He appears to have had to alienate some land to the King of Tyre to pay debts (1 Kg 9:10-14).

There are repeated warnings against providing security (a surety or pledge) for others� debts (Pr 6:1; 11:15; 17:18; 22:26). Where a government has debts, the basic security is the public assets it owns and its future ability to raise taxes. The taxpayer, or future taxpayers, are providing security, but without being consulted: �For the children ought not to lay up for the parents, but the parents for the children� (2 Cor 12:14).

Inflation

Money is a measure and store of value. Inflation may be said to run counter to Biblical injunctions against moving landmarks (Dt 19:14; Pr 22:28) and requiring the use of fair weights, scales and measures (Dt 25:13-16; Lev 19:36- 36; Pr 20:23).

This is reinforced by the way government can benefit from inflation. Without legislation or consultation, it can reduce the real (that is, after adjusting for inflation) value of its debts and increase its effective tax rates. Inflation operates against those least able to adjust for its impact. It can be seen as a form of robbery (just as debasing the coinage was in Biblical times): �Your silver has become dross...Your princes are rebellious, And companions of thieves� (Is 1:22-23).