Christians and Taxes - To Pay, or Pay Less

They say two things are certain, death and taxes, but I’d add a third…the stress that comes from taxes. I have found this to be even more evident among Christians in business. The stress not only comes from coming up with the money for taxes, while trying to be efficient and reducing tax liability, but also in trying to mix that in with one’s desire to honor God with their finances. The obvious offense is cheating or lying to reduce your tax burden. Clearly Jesus wouldn’t be happy with that. But, what about taking advantage of every possible strategy available to you in order to reduce your tax bill? If you’re doing this in an honest way; are you cutting short what God wants you to give to the government? Is your lower tax burden ultimately costing a homeless person a meal, or causing a single mother to miss out on benefits she needs to take care of her children? Is the government even doing the right thing with our money? Can we be the judge? Or, is God happy with your prudence and wisdom? Does He even care?

Et tu, Brute?

Before we go any further, let’s get it right out of the way. You know, the verse everyone will quote when it comes to taxes. The Pharisees slyly ask Jesus His opinion of the tax code, to which, after turning the question back on them, He replies:

“…“So give back to Caesar what is Caesar’s, and to God what is God’s.” – Matthew 22:21 NIV

There it is. Jesus must have had a pretty strict CPA. Who makes the Son of God pay taxes?

As Jesus often did, He answered a question to make a point, but He used that answer within a framework to make a larger point. He instructed to pay Caesar what’s his, and to God what’s His. Well, what’s God’s?

“The earth is the LORD's, and everything in it, the world, and all who live in it” – Psalm 24:1 NIV

I can hear some of you cheering inside, saying to yourself “see, we don’t have to pay taxes, because God owns it all anyway. Caesar really doesn’t own anything!” Ahem…what if your customers said the same of you and your business? Buzz kill.

In the bigger scheme of things, Jesus wasn’t using this opportunity to put something in the Bible so we would know how to navigate our tax code. He was teaching on the bigger, eternal picture. This dialog wasn’t about taxes, but about the Kingdom.

Three Questions to Find Clarity

So where does that leave us? Many of us have never thought of paying taxes as a decision that God cares about. This is especially the case if you are in the business world. In business, we just assume that we need to do all we can do to reduce what we owe. I’m not saying that is wrong. I actually believe it’s prudent and wise to do so, but there are a few questions we need to ask ourselves:

Am I being honest in my reporting of income and expenses? Am I bending the truth?

“The Lord hates lying lips, but those who speak the truth are His joy” – Proverbs 12:22 NLV

I believe the reducing of your tax bill through strategic, and honest means, is wise, prudent, and expected by our government.

Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes.” – Judge Learned Hand

Again, the action of reducing your tax liability is not, in my opinion, where God is focused. He is more concerned with what means you used to do so; truth and wisdom, or manipulation and lies.

Am I seeking to reduce my tax liability so that I can continue hoarding wealth for myself?

“Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal; but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal. – Matthew 6:19-20 NKJV

I don’t believe there’s a problem with a person managing their finances so that they have the ability to increase one’s income, or assets. This too, is wise and prudent. However, Jesus was pretty clear that the material treasures of this earth are fleeting and will pass away. Our goal should not be to die as rich as possible, but instead to use what God has given us to cause an eternal impact. This gets into the Kingdom principle of giving, or of sowing and reaping. Could money that would have otherwise gone to pay a tax bill, instead do something with an eternal impact? If you’ve increased your income or assets, and/or reinvested back into your business, is there a portion of that tax savings leftover that can go to a ministry? Is there a single mother in your church who could use a week’s worth of groceries for her family and you just happen to have the means to do it? By the way, what if you gave first to that single mother or ministry, and then used what was leftover to give yourself a raise? This is a powerful Kingdom principle that we will see play out in more detail in future posts.

Who is watching?

“You are the light of the world. A city that is set on a hill cannot be hidden. Nor do they light a lamp and put it under a basket, but on a lamp stand, and it gives light to all who are in the house. Let your light so shine before men, that they may see your good works and glorify your Father in heaven.” – Matthew 5:14-16 NKJV

This may be the most important question. For our own sake, God is watching. But, for the Kingdom’s sake, the world is watching. I heard a pastor say one time “The world is not reading the Bible. It’s reading you.” People are watching. You don’t have to broadcast your good works from the mountaintop; that would be prideful. However, a small light in a dark room cannot be hidden. Small things you do really matter. Christians should move different. We should stand out, but not in a flashy or obnoxious way. Our small moves have ripples through the circles we find ourselves in.

My father for as long as I’ve been alive, has always tithed on every dollar, and has always reported every red cent he ever made, even cash tips. When people would hear of this, they would be shocked, almost appalled at how silly that sounded. The shock of his behavior is especially magnified because my father has never been rich. My parents were middle class, but like most middle class, there wasn’t much margin for error.

He wouldn’t go around town telling people he did this, but during conversation, especially among other fellow business owners, the topic would come up. Even Christians would tell him not to report cash or to over exaggerate things. He would always just say “Well, I can’t do that. God is watching.” I could add to his statement saying that the person in front of him was watching also. My father showed that his faith in God as provider was stronger than his desire to save money by manipulation or deceit.

By the way, I was watching. His small actions sowed a seed in me that continue to grow and drive the way I move as a believer in business.

Sorry Caesar!

How much we pay in taxes shouldn’t be the focus. If you paid zero, and took full advantage of the tax code in an honest and respectable way, then great for you. If you paid a lot because you couldn’t take advantage of certain strategies, then great for you. God is always concerned with our heart, and our continuous refinement of character. Sometimes it’s not the specific action that’s important to Him, but the way in which we carry ourselves through that action that He really cares about.

So, pay your taxes, as efficiently as is possible, taking advantage of the benefits put in place by our government. But along the way, ask yourself:

- Am I being honest?

- Am I being greedy for self-gain, or can I put money to eternal use?

- Who is watching that I’m influencing?

Now that death and taxes thing… while they are certain; they are certainly not eternal. For that I’m thankful!