Bill’s tax bills: America must return to the Biblical ideals of limited government and private charity

In a recent interview with the British Broadcasting Corp., Microsoft co-founder, Bill Gates, reiterated a theme he has brought up many times in previous interviews. Apparently, he doesn’t pay enough tax. He told the interviewer, “Well, the United States has a huge budget deficit, so taxes are going to have to go up. And I certainly agree that they should go up more on the rich than everyone else. That’s just justice. … I hope we can solve that deficit problem with a sense of shared sacrifice where everybody would feel like they’re doing their part, and right now I don’t feel like people like myself are paying as much as we should.”

As far as the subjective side of this statement is concerned, who can disagree? If Mr. Gates genuinely believes that he does not contribute enough to the federal government coffers, then he is more than welcome to this opinion. Not only this, but he is also more than welcome to address the problem any time he likes. He has no need to wait for a law to be passed increasing his level of personal income tax by another five or 10 percent he is at perfect liberty to mail a check for the equivalent amount direct to Mr. T. Geithner at the U.S. Treasury Department whenever he so wishes.

So much for the alleviation of any guilt feelings of a personal nature, but what of Mr. Gates’ more objective assertions? Once again, he is of course more than welcome to his opinion, but because these assertions involve other people’s money, we are equally welcome to take him to task on it. His statement fits into five general categories: that taxation on the kind of scale that we see today is inevitable; that paying more taxation is a noble, sacrificial, and therefore philanthropic exercise; that the way to reduce the national debt is by handing over more money to the government; that taxation is a necessary step in making America prosperous again; and that the idea of the rich paying more than the poor is just and fair.

Benjamin Franklin famously remarked that in this world the only certainties are death and taxes. Whilst it is certainly true that some level of taxation may be inescapable, in the modern era we have not only come to accept its general inevitability but also the inevitability of the level of taxation we pay. It is said that the tax burden in America is lower today than it was even ten years ago. This is true, but only by a few percentage points. What is more interesting is to compare the overall tax burden now with that a century ago. In 2011, it was reckoned to be 27.7 percent of GDP; in 1910, it was 5 percent. That is, the average American pays over five times as much tax today as their great-great-grandparents did.

Why has the level of taxation increased so much? Simply because back in 1910, the size of government was much more in tune with the Biblical view of the state as limited to being a minister of God, an avenger to execute wrath upon him that doeth evil (Romans 13:4). You will search the Scriptures in vain for evidence of its being a minister of education, health, welfare, etc. Yet in our own eyes, we are clearly wiser than God, and so the consequence of accepting a state of unbiblical proportions is that we must revise Franklin’s adage for the modern era: “In this world the only certainties are death and mass taxation to fund whatever pie the government has its fingers in.”

But surely being willing to pay more taxation is both noble and philanthropic? On the one hand, Mr. Gates sounds very philanthropic when he declares that he is willing to pay more for the common good, and for a man who has given away billions of his own money to various causes, we can have little reason to think that he is being anything other than genuine here. But, is accepting a rise in taxation the same thing as being philanthropic? And more to the point, is calling for a rise in taxation for others philanthropic? Taxation, by its very nature, involves the taking of property backed up by the threat of force. So any calls for it to rise is, in effect, asking the state to coerce others into handing over property which they may have no wish to hand over, but should they fail to do so, will find themselves incarcerated. Since philanthropy involves giving willingly, whereas what Mr. Gates is suggesting involves taking, it ought to be clear that the two things have almost nothing in common with one another.

The third assumption is that taxes must be raised in order to reduce the national debt. There are two flaws in this approach. To begin with, what actually happens when taxation is increased beyond a certain threshold is that tax receipts begin to go down, not up, because every entrepreneur out there has now been handed a disincentive to invest, produce, and expand. But the even more crucial fallacy is the idea that handing even more money over to the institution that has run up a debt so large that no one can actually remember how many zeros it contains could have any good effect. Why would it? Would it be a wise move to hand money over to a gambler who has a proven track record of accumulating larger and larger debts every year? There are three methods that government can use for reducing the debt: taxation, printing money, and reducing spending. Two of these methods are worse than useless, and in case you were wondering which, it is the first two. There is only one way that America will reduce its enormous national debt, and that is if the one that has amassed the debts—the reckless, gambling state—massively cuts its spending.

Fourthly, it is assumed that an increase in taxation is necessary for a return to economic prosperity. Winston Churchill knew otherwise, once observing, “We contend that for a nation to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.” Why so? Because taxation is, by its very nature, a dead weight to the economy, pushing it back down whenever it shows any sign of rising. Mr. Gates, of all people, should understand this. His corporation employs almost 100,000 people worldwide. Had he and his company faced significantly higher taxes throughout the last few decades, Microsoft’s profits would have been less, its success not as great, and many thousands of people who work for Microsoft might now be out of work. Taxation is a job destroyer, not a job creator, and an increase in taxation for anyone—rich or poor—will never do anything other than diminish prosperity. As Churchill once again put it so eloquently, “The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”

Lastly, Mr. Gates claims that for the rich to be taxed more than the poor is “just justice.” Not according to the Bible it isn’t. In the Old Testament, there are only two types of taxes (neither of which was payable to the civil government, by the way). One of these was the Temple Tax, which was a fixed sum for all, regardless of wealth (see Exodus 30:15). The other was the tithe, which, of course, is a flat 10 percent rate for everyone, regardless of how wealthy they were. Nowhere in the Bible is the idea of government fleecing the rich to pay for the poor commended or commanded.

Despite this, many Christians would agree with Bill Gates that taxing the rich more is justice. They see a world full of haves and have-nots and believe that surely God would have the rich pay more. Well, it is certainly true that God expects the rich to use their wealth to help the poor; this is something that is reiterated throughout the Bible, especially in the prophets where the wealthy and powerful are rebuked time and time again for turning a blind eye to the poor. But if God knew that they would often behave in this way—and He did—why didn’t He simply introduce a system of wealth redistribution into the laws of Moses? Why did He not include a Welfare State alongside the rest of the judicial laws, calling on Moses as the civil ruler to forcibly extract the money from the rich to give to the poor? Simply because His kingdom just doesn’t work like this. His kingdom is a voluntary, not a coercive one. His welfare program is based on brotherly love and charitable giving, not on the kind of self-defeating government extraction and handouts we see today (see Deuteronomy 15:7-8 and 26:12 for instance).

Bill Gates’ solution is one that ultimately hinders economic recovery and harms the very poor that it claims to be helping. Whilst the state is given the green light to pile on more taxes, hard work and entrepreneurship will be discouraged and growth will be stifled. Whilst taxation, rather than state spending, is seen as the major issue, the nation’s debt will continue to rise and true economic prosperity will get ever more elusive. And whilst the state remains the primary means of welfare to the poor, the state will continue to grow into tyrannical proportions, the poor will remain poor, and individuals, families, and churches will continue to ignore the duty that God has assigned to them for the care of the poor.

Bill Gates may send a check for the U.S. Treasury Debt Servicing Program any time he likes, but it will avail nothing. Nor will coercing his fellow high earners to do the same. Only a return to the Biblical ideal of small government, coupled with the Biblical ideal of the “haves” voluntarily and charitably helping the “have-nots” will do the slightest bit of good.

Rob Slane lives with his wife and five home-educated children in Salisbury, England. He is the author of The God Reality: A Critique of Richard Dawkins’ The God Delusion, contributes to the Canadian magazine Reformed Perspective, and blogs on cultural issues from a Biblical perspective at www.theblogmire.com.