Catholic social teaching, taxation and generosity

The Catholic Bishops' Conference of England and Wales recently published a document on taxation titled  «Render unto Caesar what is Caesar's.». Catholic doctrine on taxation is relatively sparse. Catholics apply principles such as the universal destination of goods, the right to property and the primacy of the family to try to develop practical approaches to taxation in the wide variety of specific circumstances in which they find themselves. Predictably, they disagree with each other.

They disagree on how to apply the principles in particular circumstances. A politician from one party, for example, might think we should have a smaller, more effective welfare state, with more resources going to local action and less to families. A politician from another party might believe in more decisive action at the central government level, involving higher taxes and direct spending to reduce poverty.

Empirical issues also matter. One might think that they are irrelevant to a body of teaching that has moral principles as its basis. However, Pope Benedict (when he was Cardinal Ratizinger) wrote the following:

A morality that believes itself capable of dispensing with technical knowledge of economic laws is not morality, but moralism. As such, it is the antithesis of morality... Today we need a maximum of specialized economic knowledge, but also a maximum of ethics so that this knowledge is put at the service of the right objectives.

Again, opinions may differ. Those who share a political stance might consider that higher taxation harms family life, work and entrepreneurship, thus aggravating the problem the government is trying to solve. Others, on the other hand, might look at the evidence and come to a different conclusion. It is prudence that links the empirical with the moral issues.If a person reduces his or her disposable income by donating to charities, it is only fair that he or she be taxed on that reduced disposable income.

In «Render unto Caesar the things that are Caesar's» different perspectives were reflected, but two messages stood out quite strongly.

The first point was the importance of levying taxes sparingly and in proportion to ability to pay. As far as charity is concerned, this principle implies two things: first, that people have enough after-tax money to meet their charitable obligations; and second, that tax revenues are calculated after deducting charitable donations made. In fact, the Gift Aid system works quite well in our country.

At  «Render unto Caesar what is Caesar's.» , André Alves wrote: «Taxes should be moderate, as they reduce a family's ability to meet its responsibilities, including charitable obligations». And, in her contribution, Ruth Kelly (former Treasury minister and currently a member of the Vatican Council for the Economy) wrote: «If a person reduces his or her disposable income by giving to charity, it is only fair that he or she should be taxed on that reduced disposable income.».

There are many reasons why the state must ensure that it leaves sufficient room for charitable work. Perhaps Pope Benedict XVI put it best in his encyclical  Deus caritas est :

The State that would provide everything, absorbing everything, would ultimately become a mere bureaucracy incapable of guaranteeing that which the suffering person - every person - needs: namely, personal and loving attention... Ultimately, the claim that just social structures would make charitable works superfluous masks a materialistic conception of man: the erroneous idea that man can live “on bread alone” ( Mt 4:4; cf. Dt 8:3), a conviction that demeans man and ultimately ignores all that is specifically human.

In the same encyclical, Pope Benedict XVI explained the three functions of the Church, one of which is charity. He wrote: «The Church's deepest nature is expressed in her threefold responsibility: to proclaim the word of God, to celebrate the sacraments and to exercise the ministry of charity. These duties are mutually presupposed and inseparable».

And this function is not something that can be delegated.

Pope Benedict XVI also wrote about how charity was known, admired and crucial in bringing people closer to the faith in the early Church. This practice radically influenced the development of the Church's institutional structures, which were unfortunately destroyed during the Reformation. Today, however, these charitable structures exist, of course, in other forms.

Pope Benedict XVI concludes this section of  Deus caritas est  noting: “For the Church, charity is not a kind of welfare activity that could equally well be left to others, but is part of her nature, an indispensable expression of her very being”.

In the first reading of Divine Mercy Sunday, we read about how the early Church shared its goods in a radical way. It was not an activity delegated to the political order (which was logical given the political situation of the time). It was an act of love that, instead of being done on a large scale, reached that magnitude by being replicated on a small scale. This distinction is important for organizing the Church's charitable work.One of the problems with the modern welfare state, perhaps, is that it can lead us to consider charity as a marginal obligation.

One of the problems with the modern welfare state, perhaps, is that it can lead us to regard charity as a marginal obligation. Indeed, it is paradoxical that the welfare state developed to fill the gaps left by voluntary initiative and social welfare societies, and that we now think of charity as a mere supplement to those gaps.

But the call to charity in the Church has always been demanding. Pope Pius XI emphasized, without question, the responsibility of the rich to support the less fortunate through charity. First, he pointed out that the obligation of the rich to use their property for the benefit of others went far beyond their legal obligations. Second, he emphasized that these obligations were serious, stating, «The Holy Scriptures and the Fathers of the Church constantly declare, in the most explicit language, that the rich are bound by a very grave precept to practice almsgiving, beneficence and munificence.».

The rich, it should be said, can fulfill this role in a variety of ways, including through entrepreneurship; the point is that money should not sit idle and accumulate for the sake of accumulating: it should be put to good use.

Older encyclicals tended to resort to the language of judgment to a greater extent than modern encyclicals. This is especially noticeable with regard to the obligations of the rich toward the poor. This, for example, is seen in the  encyclical Rerum Novarum of Pope Leo XIII:

Therefore, those whom fortune favors are warned that riches do not bring freedom from pain nor serve for eternal happiness, but are obstacles; that the rich should tremble before the threats of Jesus Christ... and that an account must be rendered with utmost severity to the Supreme Judge for all that we possess.....

He went on to say that private ownership of property is a natural right of man. But then he stated that, if the question is posed, «How should one's possessions be used?», the answer is that it is a duty to give to others what we do not need; a duty that should not be required by human law (except in extreme cases), but a duty of Christian charity.

In conclusion, the importance given to charity in the Easter readings; the fact that charity is one of the three pillars of the Church described by Pope Benedict XVI; and the seriousness with which Pope Pius XI and the late Pope Leo XIII approached the subject of charity all point to the profound nature of our obligations to those in need.

We still benefit today from the radical charity of previous generations, as we celebrate Mass in the buildings they financed or send our children to study in those school buildings.

And, to end on the most positive note imaginable, when we come to the moment of judgment, as Pope Leo XIV wrote immediately after his warnings to the rich, God will regard a kindness done to the poor as if we had done it to Himself.

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This article was originally published on the Catholic Social Thought website of the University of St Mary. Reprinted here with permission of the publisher.