This article summarizes a wealth of information found in With All Your Possessions: Jewish Ethics and Economic Life, by Meir Tamari.
In virtually all societies, functions which lie beyond the domain or the capability of the individual are publicly financed. Jewish communities throughout history have assessed contributions for such functions from individual members, and Jewish tradition is rich with law and discussion about how to fairly distribute this burden. In this summary, as in the Tamari text on which it is based, the imposition of required contributions will be called “tax” or “taxation;” in a modern sense, most of the concepts may be applied to the dues structure of a congregational community.
The Community’s Responsibility and Rights
Any system which asserts the right of the community to assess property from the individual must be justified to its members, either philosophically, ideologically or religiously. In Jewish thought, the core concept underlying such a right is society’s responsibility for each of its members, down to the least fortunate — a responsibility which extends over and above the mitzvah of individual charity. Ultimately, the rabbis would spin out the logical extension of this: that the community (including its less fortunate members) has some rights in the property of all the individuals in the community.
The wellsprings of this communal power were to be found in Halakhic text interpretations, which Tamari places in four general categories: the rights of neighbors (joint owners of adjacent property must co-finance common needs); the obligations of the citizen (each must contribute to the economic security of the whole); the rights of the king (kings in the Davidic line were empowered to take private property [with compensation] for the public good); and the law of the land (the secular government’s law, if not illegal or discriminatory, was to be honored by the Jewish community). The result was a system of contributions for public functions-support of Torah study, building of cemeteries and synagogues, feeding the poor, supporting widows and orphans-which had the force of law (and was in fact enforced).
More importantly, concepts of basic equity among the inhabitants were promulgated. The level of taxation derived from the consent of the community. Tax evasion was the equivalent of theft from the other community members. Taxes were to be imposed by a formula which approximated fairness and equity. Widows, orphans, and the very poor were exempt from taxation. These concepts all had roots in Torah and its explication. They were interwoven with the three basic types of taxation which historically were found in Jewish communities.
Types of Taxation
Over the centuries, taxes have been levied in three basic ways, and Jewish communities have employed all three: (1) the poll, per capita, or “flat” tax-each taxpayer pays the same amount or rate; (2) the excise tax or “user fee”-only the taxpayer who utilizes a service is taxed on the use of it- and (3) the “progressive” tax – a tax based on the income or wealth of the taxpayer. (It will easily be seen that a modern congregation may employ one, two or three of these methods in raising the revenue necessary for functioning as well.)
Communal taxes based on income were unknown outside the Jewish world until the nineteenth century. In Jewish life, such taxes were known from antiquity. They were not pure income taxes as we know today (although see the discussion of tithing below) but were user taxes which were allocated based on the benefit derived-an allocation which in some cases was further tempered on the basis of wealth. An expense which protected the lives of all equally justified a per capita tax, but an expense which protected the property of the wealthy should result in a tax calculated according to wealth.
The sophistication of this system is illustrated by the rabbinic ruling on the cost of building a city wall. In medieval Europe, the wall was to protect property, not life, so a per capita tax was not justified. Therefore the rate of such tax should be based on wealth. But those who lived closer to the city’s edge (and the wall) needed its protection more than those in the city center. So the tax was further apportioned to place the larger share of the total expense on those living close to the wall.
Of course with some functions, such as assistance to the poor, utility never entered the computation, and these taxes were based strictly on wealth. Why not per capita? Because, the rabbis said, those who possess wealth bear a greater moral responsibility to fund the needs of those who do not. Also, as to public expenses where everyone derives an equal benefit, such as the funding of a cantor’s salary, the rich person must fund the poor person’s pro rata share, simply because the poor person cannot fund his own. An additional wealth-based source of support for the poor was the tithe, a mandatory portion (usually one-tenth) of one’s income which was paid every three years. It too featured a complex system of halahkic rules used to compute the exact amount.
The tax base and exemptions
As noted above, Jewish values demanded that certain property be excluded from the tax base and certain persons exempt from taxation. Widows, orphans and the poor were usually exempt. So, too, often were the handicapped. Torah scholars were exempt. And the portion of a person’s income set aside for making aliyah was exempted as well. In addition, newcomers were often given a year’s grace.
Communal taxes were based on “equity,” that is, the value of income-producing assets. The type of wealth taxed was carefully denoted so that taxes would not be confiscatory (i.e., so that property which did not produce income would not, eventually, be consumed by the tax), Therefore, personal belongings, one’s residence, books, and monies set apart for charity were not counted in the tax calculation.
In sum, the Jewish concept of taxation is democratic, compassionate, non-confiscatory, and in many instances progressive. One of the primary purposes of such taxation is publicly funding the transmission, study and preservation of Jewish values, ritual and community. Taxes, when imposed, are mandatory because the community has the right to make them so. A failure to fulfill one’s mandated responsibility, therefore, is theft from the community. Fundamental to traditional Jewish economics is an understanding that, ultimately, all of our wealth has its origins with God, and our enjoyment of that wealth is conditional upon how we use it. Each Jewish community is challenged, therefore, to use its collective resources well, and to be fair and thoughtful in how it decides to raise the monies needed for its well-being.