Introduction to 'Render Unto Caesar' by Philip Booth, Director of Policy and Research, Catholic Bishops' Conference of England and Wales.
Philip Booth
Director of Policy and Research, Catholic Bishops’ Conference of England and Wales
Catholic social teaching sees the role of the state in a positive light, built on the fact that human beings are, by nature, social. Although we express our need for socialisation through many other institutions within society, government has a particular role.
An earlier Bishops’ Conference document described how the state should serve society by promoting the common good while respecting the legitimate liberties of individuals, families and civil society. Furthermore, the state should act in such a way that it secures the conditions required for all people to attain our true material and spiritual good.2 The Church believes that governments should have a positive role in promoting the common good through decisions related to economic life. However, government should discharge their duties without taking away the responsibilities of other institutions, including the family, the Church, civil society, schools and business. Indeed, the state should assist those other institutions in the discharge of their responsibilities.
While the Church does not accept the primacy of economic matters over matters of the spirit, she holds that “economic activity is necessary and, if it is at the service of man, it can be ‘a source of brotherhood and a sign of Providence’. It is the occasion of concrete exchanges between man, of rights recognised, of services rendered and of dignity affirmed in work”.3 The Church therefore has an interest in temporal matters, and the light of faith can be shone on economic matters to help our understanding of them. As was said by Cardinal Renato Raffaele Martino at the launch of the Compendium of the Social Doctrine of the Church (2004), the main official document summarising Catholic social teaching: “The Church is an expert in humanity”.4
The Church ministers to humanity. As such, the Church has passed judgement throughout the ages on whether economic actions are morally wrong, virtuous or neither. Despite this, issues to do with the role of government in the economic sphere are complex, and there is not necessarily a clear right or wrong answer to many of the questions that arise: Catholics in public life are called to use the virtue of prudence to make judgements about political and economic matters on which there may be no clear answer.
Given that the state has responsibilities in the economic and political sphere, it must have access to the resources to fulfil those responsibilities. In almost all cases in modern states, these resources will come from taxation. At the same time, government must not exhaust the resources of other institutions in society, including the family, through excessive taxation.
From her institution, the Church has preached the virtue of solidarity, which demands that citizens show a “firm and persevering determination to commit oneself to the common good; that is to say to the good of all and of each individual, because we are all really responsible for all”.5 In so far as this is expressed through the political realm, the virtue of solidarity requires that we willingly meet our obligations to contribute to the cost of government and do not take decisions based on our own self-interest which can lead to the democratic process – or indeed government itself – becoming corrupted.
In this context, the question of taxation is an especially complex one. Although the Church has always taught that the better off in society have serious obligations to poorer members, the respective roles of individual responsibility, charity, civil society and the state in ensuring those obligations are fulfilled is both contested and contingent on time and place.
Furthermore, to make judgements on the size and shape of the tax burden, we have to consider a number of questions. What goods and services should the state ensure are provided? Should the state provide or pay for these goods and services directly or help families to obtain them from a diverse range of providers, including the Church (which is the model followed in both health and education in many countries)? Should the state finance these services for everybody, or should it provide a safety net for those who cannot pay for them? To what extent should the state redistribute income or use other policies to help the least well-off? How should the tax burden differ between families of different shapes and sizes and between individual taxpayers and of corporations? Should government spending be financed by debt? What levels of government should be responsible for raising taxes and providing services?
It is difficult to find direct answers to these questions in Scripture. However, the tradition of Catholic social thought and teaching does provide some guidance in relation to the principles that should be followed in the wide variety of different circumstances in which governments find themselves.
The right level of taxation for a rich country with an ageing population is unlikely to be the same as the right level of taxation for a poorer country with a large proportion of people working in agriculture or in the informal economy. Pope Leo XIII, for example, warned about the danger of excessive taxation in his landmark encyclical Rerum Novarum (1891) when taxation was around one-fifth of today’s levels.6 However, recent documents on Catholic social teaching have promoted more strongly the idea that the government should ensure that all have access to welfare, education and healthcare and play a role in financing such access.
As noted above, the state should not necessarily be the first provider: the state should create conditions so that families, the Church, civil society and commercial organisations can ensure that all people have access to what they need for a dignified life. Higher levels of taxation may support this objective in some cases and undermine it in others. In recent years, Catholic social teaching documents have both criticised reductions in welfare spending and criticised the impact of welfare provision by the state as being bureaucratic and damaging to society in other respects. Once again, prudent discernment is required in the practical circumstances in which we find ourselves. This is one reason why Catholics divide between political parties and have divergent views on the role of the state and taxation.
In Part One of this document, four chapters examine Scripture and various strands of Catholic social thought as they relate to taxation.
In the first of those chapters, Gareth Rowe and Anna Rowlands explore the development of Catholic social teaching on taxation. From the outset, the authors stress our natures as social beings:
“Our origins are social (the divine unity of persons in the Trinity); our nature is social (we cannot achieve the goods we most yearn for in life alone but only in relationship to or with others); and our destiny is social (blissful union with God and the communion of saints at the end of time). The life of association, collaboration and social creativity is part of our nature and expresses our purpose.”
They explain how the tradition of Catholic social teaching has evolved. Some key principles that have developed in that tradition are that taxation should be moderate and fair; taxation should be related to the ability to contribute; and, in later years, an international dimension has been introduced: taxes should be levied in richer countries to assist the development of poorer countries. Later social encyclicals have built on these themes to emphasise the preferential option for the poor, inter-generational solidarity, and care for our common home. All three of these concerns might lead us to conclude that taxes on activities that cause environmental harms are justified.
The Church has made clear, Rowe and Rowlands point out, that society should be organised in such a way that all citizens have the basic goods and services for a dignified life. Where people would otherwise be without such goods and services (which include food, shelter, clothing, healthcare and education), in accordance with the preferential option for the poor and the universal destination of goods, the state should step in and ensure provision is made whilst taxing citizens in accordance with their ability to contribute.
Rowe and Rowlands also explain how there is a moral dimension to taxation. Taxes should be levied in such a way that they promote the common good. This is not a purely transactional matter of taxpayers providing resources to the state so that the state can provide goods and services that we cannot obtain through other means. The whole process of taxation and the use of resources by government should be based on moral principles. T he resources of government should be used in a way that builds, rather than undermines, the common good of society as a whole. This may raise questions about how taxes are spent on defence or on certain types of healthcare. The twentieth-century Catholic social activist Dorothy Day raised some of these questions, as discussed in the first chapter.
The modern Catholic social teaching discussed by Rowe and Rowlands developed out of centuries of Catholic social thought and witness. St Thomas Aquinas was a particularly influential figure in this respect. The chapter by André Alves examines the thought of St Thomas and, also, of the late scholastics of the 16th and 17th century. This Thomistic way of thinking influenced strongly the early social encyclicals of the Catholic Church of the late nineteenth and early twentieth centuries.
The practice of the virtue of justice was key to the teaching of St Thomas and the late scholastics. It would be unjust for governments to tax their citizens excessively and for purposes other than the fulfilment of duties necessary for the promotion of the common good. It is important to recognise the fallibility of governments and that their responsibilities should be appropriate and not unlimited.
The idea that Catholic social teaching is a balanced tradition certainly comes through the late scholastics who taught that taxes should be moderate and who warned about the need for moderation when it came to government expenditure. They also warned about the grave dangers associated with the mismanagement of a country’s public finances.
Where taxes are levied, the late scholastic tradition suggests that they should be related to ability to pay – perhaps proportionate to that part of income that was earned above the level necessary to meet basic family obligations. In times of national emergency, it may well be appropriate to levy higher levels of tax.
Throughout Catholic social teaching, including in the work of St Thomas and the early social encyclicals, it has been stressed very strongly that the obligations of the rich to the poor do not end with taxation. The rich will have to answer to God if they do not use their riches to support the poor more broadly.
An important contribution of the late scholastics was their analysis of inflation. Where inflation arises as a result of governments or central banks creating money, it can impose an arbitrary burden on particular groups in society, often afflicting the poor. In effect, it acts as a tax on those who are on low incomes, which might not be uprated with inflation, as well as on those on fixed incomes who will often be amongst the older generation.
Richard Turnbull follows with a chapter on taxation and Sacred Scripture. It is difficult to draw lessons from Scripture because the political situation was so different from our own. Government was often an instrument of oppression and, in New Testament times, an instrument of imperialist oppression in the Holy Land. Taxation was often levied on the poor for the very purpose of funding their oppression. Nevertheless, Turnbull is able to draw some conclusions that might inform contemporary Catholic thought on taxation.
It is clear from biblical sources, he argues, that the role of the state should be limited and that there is a vital role for the family and voluntary initiative in meeting material need. At the same time, taxation is a lawful activity of a properly constituted government, and we should pay taxes that are due. Taxes in Biblical times took various forms, though there is little evidence of progressive taxation. In this context, it is worth noting that the progressiveness of a fiscal system does not depend on the shape of the tax system alone: how tax receipts are spent is important too. A system that taxes an equal proportion of all incomes, in order to provide for the poor, might assist the less fortunate more than one that is progressive in terms of tax rates but where the proceeds are used for forms of government spending that benefit the better-off.
Ruth Kelly starts her analysis by examining how we might think about the functions of the state post-Covid-19. She argues that social interconnections have become degraded as a result of a more individualistic mindset, including amongst young people. She expresses concern that the state has taken over many of the functions of civil society and the family. In addition, government policies have not nurtured the family. Kelly points to statistics highlighted by the former Chief Rabbi, the late Jonathan Sacks, relating to the decline in marriage and the increased tendency for people to be living alone or away from their parents.
In developing her argument, Kelly contrasts the French and British Enlightenments. The latter saw an important role for the family, civil society and religious institutions in creating a healthy society, and this was once reflected in government policy in Britain. She calls for a restoration of that way of thinking and a rebuilding of society from the bottom up and explains how this is entirely consistent with the tradition of Catholic social teaching. It also resonates with our experience of so many successful social initiatives during the Covid-19 pandemic.
In many ways, Kelly’s chapter echoes part of Pope Benedict XVI’s encyclical, Deus Caritas Est (2005) in which he writes:
“Love — caritas — will always prove necessary, even in the most just society. There is no ordering of the State so just that it can eliminate the need for a service of love… There will always be suffering which cries out for consolation and help. There will always be loneliness. There will always be situations of material need where help in the form of concrete love of neighbour is indispensable. The State which would provide everything, absorbing everything into itself, would ultimately become a mere bureaucracy incapable of guaranteeing the very thing which the suffering person — every person — needs: namely, loving personal concern. We do not need a State which regulates and controls everything, but a State which, in accordance with the principle of subsidiarity, generously acknowledges and supports initiatives arising from the different social forces and combines spontaneity with closeness to those in need. The Church is one of those living forces…”.7
There is a dilemma, though. Once the family and civil society institutions that provided support and welfare for those in need have degraded and the state has taken on their functions, it is not realistic for the state then simply to withdraw: it is not easy to move from where we are to where we might want to be. Ruth Kelly provides some proposals that might help move us in the right direction. Her proposals include ensuring that the tax system does not continue to disadvantage families in which family members work in the home looking after their children or elderly relatives. She also proposes giving greater fiscal autonomy to lower levels of government, in line with the principle of subsidiarity.
Overall, we could summarise the chapters in Part One as follows:
The chapters in Part One of this publication lead to some clear conclusions, but they do not tell us how tax policy should be designed in all the myriad different circumstances that apply at different times and in different places. Part Two of this document contains eight reflections on specific themes which are grouped together and summarised below. Three reflections are on the subject of taxation, work, welfare and the family. The next two look at government borrowing and justice between the generations. The final three examine tax evasion and avoidance, amongst other topics.
Pope St John XXIII said that the family “must be regarded as the natural, primary cell of human society. The interests of the family, therefore, must be taken very specially into consideration in social and economic affairs.”9 In the UK, the existence of the family unit is more or less ignored and sometimes penalised in the tax system, as the first reflection by Andrei Rogobete shows. In countries such as France and Germany, two families with the same income will pay the same level of tax whatever the split of income between the main adults in the family. In Britain, single-earner families, and families in which one adult has a lower level of earnings than the other adult, can pay far more tax than dual-earner households. This penalises families that take on caring responsibilities in the home for children or the elderly. It also violates an important principle of taxation – tax levied should take account of the resources available to a family. In addition to this problem, the way tax and welfare systems in the UK interact often leads to a situation where it can be financially beneficial for parents of children to live apart rather than together. Of course, we hope that families do not take such decisions purely on financial grounds. However, it is surely imprudent, unjust and undermining of the common good to penalise family formation financially. Furthermore, if family formation is penalised, the principle of subsidiarity is similarly undermined as the state will inevitably have to take on some of the functions that would normally be undertaken by the family – such as the care of children or the elderly. This, in turn, will raise the burden on those families that have to pay increased taxes as a result.
The second reflection is by Russell Sparkes, an academic and practitioner. He examines the history of Catholic social teaching and action in relation to the provision of welfare (health, education and income provision in times of need). This is highly relevant to taxation because the main explanation for current levels of taxation is the level of spending on welfare. Sparkes suggests that our approach to welfare has moved away from the tradition of Catholic social teaching and that this makes us poorer spiritually as well as materially. He notes that the Church is still the largest provider of healthcare in the world and yet, in the UK, we have rejected pluralist models of healthcare provision involving the Church in favour of (in his words) a system of “health provision [that] is probably unique in Europe for lacking any substantial church, charitable or mutual provision”. Sparkes refers to recent Catholic social teaching on the welfare state, and to some of the comments of Pope Francis, which have criticised a “welfare mentality” whilst calling all Christians to fulfil their obligations to the poor. It is rare to question the functions of the state in modern political discourse, but Sparkes does that. In doing so, he is not neglecting the Catholic concern for the poor. Instead, he is asking us to reflect, in good conscience, on whether society, the community and the family should play a more active role in promoting the welfare of all citizens.
Marc Besford, former President of Young Christian Workers, brings an extra dimension to the discussion in the third reflection. He emphasises Catholic teaching on the just wage and cites the absence of a just wage as a cause of poverty. Besford quotes Pope Benedict XVI’s encyclical Caritas in Veritate:
“In many cases, poverty results from a violation of the dignity of human work, either because work opportunities are limited (through unemployment or underemployment), or ‘because a low value is put on work and the rights that flow from it, especially the right to a just wage and to the personal security of the worker and his or her family’”. (Caritas in Veritate 63, emphasis in original)
This is an important contribution to the discussion. A high proportion of tax revenue is used to provide services or income enhancements to the less well-off. We should consider whether this is made necessary as a result of the treatment of workers by their employers. There are other dimensions to this problem. An employer cannot necessarily provide a family wage to somebody who works part-time and, arguably, other failings in government policy raise costs considerably for families.10 This could open up a wider debate about many areas of public policy. But Besford’s point is important: we should not view questions of distributive justice solely through the prism of taxation; we should ask whether other aspects of injustice lead taxes to be higher than necessary.
Section V of Pope Francis’s encyclical on the environment, Laudato Si’, is entitled “Justice between the generations”. One generation does not have a right to systematically consume in such a way that it impairs the ability of future generations to live a flourishing life. This argument can be used as a justification for taxes on activities that harm the environment, as noted in Part One.
Another aspect of justice between the generations relates to the accumulation of government debt. As is discussed in the reflection by Philip Booth, there may be situations in which government borrowing is justified. However, questions can be raised about the accumulation of debt by governments to finance current consumption spending in normal times.
This has been happening in a number of developed countries for many years and imposes a burden on future generations. Government debt interest in the UK is now a greater cost than spending on defence and public safety (the traditional main functions of government) combined. Debt interest costs are also an order of magnitude greater than foreign aid spending. They are, argues Booth, a real burden for coming generations.
Patrick Riordan SJ takes a different perspective on this issue and suggests that the main problem for a government that borrows in its own currency is that the borrowing can lead to inflation. Riordan accepts that, if it does so, this is still problematic. For example, it would lead to a government not properly fulfilling one of its main responsibilities as stated in the Catechism of the Catholic Church (CCC 2431).11 However, Riordan believes that borrowing should be and can be restrained before that problem arises.
An interesting aspect of inter-generational justice arises from the effects of welfare systems financed by the taxes of the working generation rather than through savings. This feature of modern welfare systems, combined with the very large declines in the birth rate experienced by Western countries in the last 40 years, is creating serious challenges for governments. We are entering the “demographic winter” to which Pope Francis has referred on a number of occasions.12 The smaller number of people of working age will have to pay much higher levels of taxes than their predecessor generations to finance the pensions and health and social care provision of the standard which older people have been led to expect. The question can be asked as to how easy it will be, in those countries where birth rates have fallen the most, for governments to fulfil their legitimate functions. Concerns could also be expressed about whether this problem will lead to inter-generational conflict within our democratic systems. As this difficult issue unfolds, the Church must encourage all who participate in the democratic process to exercise the virtues of prudence, temperance and courage in public life.
The question of tax evasion and avoidance is raised by Gerald Grace, Justin Thacker and David Palmer. Tax evasion involves not paying taxes that are legally due and is a form of theft. It is almost always morally wrong. Those who practice tax evasion should be held to account through the criminal justice system. The Catechism of the Catholic Church includes tax evasion as one of the offences against the seventh commandment.13 Culpability for evading taxes is not reduced if the criminal justice system is not effective in enforcing tax laws.
Tax evasion is practised by criminal networks and by some very wealthy people. However, Catholic social teaching calls all of us to holiness in economic, social and political life. Significant amounts of tax are evaded by individuals and small businesses as well as by larger corporations. This can occur through micro-businesses putting spouses on payrolls and exaggerating their salaries, inflating business expenses, or by accepting and not declaring payments in cash. It is important that Christians neither practise nor encourage this behaviour.
Tax avoidance is a more complex subject. There are some forms of avoidance that are benign and involve taking advantage of rules designed to encourage prudent or otherwise virtuous behaviour. Many people, for example, avoid tax by paying part of their salary into a pension scheme or by donating to charities. However, other forms of avoidance stretch the law to its limit and are clearly breaking the spirit, if not the letter, of the law and would be reprehensible. Again, it is clear that large corporations and rich individuals are culpable when it comes to aggressive tax avoidance. However, none of us should be passive bystanders. We should all willingly pay taxes that are due. And, where we vote as shareholders or act as consumers, we should do our bit to call those who avoid taxes aggressively to account. As Archbishop Peter Smith noted in the foreword to the last Bishops’ Conference document on taxation: “Our willingness to pay it is a sign of our solidarity with one another and of our humanity.”14
Pope John XXIII wrote, in Pacem in Terris:
“Here once more we exhort our sons to take an active part in public life, and to work together for the benefit of the whole human race, as well as for their own political communities. It is vitally necessary for them to endeavor, in the light of Christian faith, and with love as their guide, to ensure that every institution, whether economic, social, cultural or political, be such as not to obstruct but rather to facilitate man’s self betterment, both in the natural and in the supernatural order.” (Pacem in Terris 146)
These are strong words. Members of the Church have a duty to reflect on the role of government and taxation and then vote in such a way that does not serve personal interests but, instead, serves the common good of society as a whole.
We face difficult questions to which there are no clear answers in Catholic social teaching. How high should taxes be? On what should tax revenue be spent? How should taxes be levied, especially taking into account the need to nurture the family and civil society as well as provide for those in greatest need? To what extent should taxes be used to curb behaviour that is destructive of the natural environment? What should be the role of the state as compared with society, the community and the family in the provision of support for those in need? Prudent discernment is required to apply the principles of Catholic social teaching to these questions. Our authors have provided commentary and reflections that will help us in the process of discernment.
As noted above, one phenomenon that makes these debates especially difficult in the world’s richer countries is that of population ageing which means that a relatively smaller working population is paying taxes to support a growing older population. In the United Kingdom, some people argue that families are paying record levels of taxation. Others argue that welfare and other government services to people of working age are being reduced. Both groups are correct, and the explanation for this situation, at least in part, is the ageing of populations. As also noted above, Pope Francis has described countries in this predicament as facing a “demographic winter” and also as being “often rich in resources, but poor in hope”. In our own country, the fiscal strains are projected by the Government’s Office for Budget Responsibility to become significantly worse over time.
We must ensure that this situation does not become a source of inter-generational conflict or despair. Indeed, we can only meet these challenges by co-operation between the generations at every level in society. These great challenges, however, remind us that we should treasure children and certainly not simply regard them as a financial cost, and that we should treasure wider family structures too. Perhaps this fact itself needs to be better reflected in our fiscal systems.
There are other significant trends. Action that will be taken in relation to climate change will have an impact on government spending and the cost of energy for families and businesses. And the fragmentation of families leads to greater costs for state welfare systems and raises questions about where the responsibility for support should lie.
In these challenging times we need to exercise the virtues at all levels in political society. This is a responsibility of voters, political party supporters and politicians. We need to have the courage to take decisions that might not be in our own interests; we need to temper our appetites that lead us to desire more material riches now at the expense of the future; we should act with justice so that the burden of taxation is appropriately spread, taking account of future generations; and we should reflect prudently so that we take wise decisions in these challenging circumstances.
Pope Francis has regularly called for dialogue and asked that “particular interests or ideologies will not prejudice the common good”.15 While Catholic social teaching does not prescribe a set of specific policies for fulfilling this vision, it does suggest a set of principles that should inform debate so that public policy can reflect those principles in the context of the ‘signs of the times’. To get from the principles to practical policy, we need dialogue which should be conducted with generosity of spirit. It is hoped that this document will contribute to that dialogue.
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[2] Committee for Public Life, Catholic Bishops’ Conference of England & Wales, Taxation and the Common Good (2004) 13.
[3] Pope Paul VI, Octogesima Adveniens (1971) 46. See also Pope Paul VI, Populorum Progressio (1967) 86.
[4] Cardinal Martino, ‘Presentation’, Compendium of the Social Doctrine of the Church (2004).
[5] Pope John Paul II, Sollicitudo Rei Socialis (1987) 38.
[6] Pope Leo XIII, Rerum Novarum (1891) 47.
[7] Pope Benedict XVI, Deus Caritas Est (2005) 28(b) (emphasis in original).
[8] Pope Paul VI, Gaudium et spes (1965) 30.
[9] Pope John XXIII, Pacem in Terris (1963) 16.
[10] See, for example, Caritas Social Action Network (CSAN) and The Benedict XVI Centre for Religion and Society, St Mary’s University, Twickenham, ‘Perspectives on political, social and human aspects of the housing crisis’ (January 2019).
[11] CCC 2431: “Economic activity, especially the activity of a market economy, cannot be conducted in an institutional, juridical, or political vacuum. On the contrary, it presupposes sure guarantees of individual freedom and private property, as well as a stable currency…”.
[12] For example, see Pope Francis, Address to the participants in the second edition of the General States of Natality (12/5/2022).
[13] CCC 2409.
[14] Committee for Public Life, Catholic Bishops’ Conference of England & Wales, Taxation and the Common Good (2004).
[15] Pope Francis, Laudato Si’ (2015) 188.
A Catholic understanding of taxation requires a Catholic understanding of the role of the state.
The framing question for this reflection is whether addressing the national debt from the response to Covid-19 will require cutbacks in expenditure or increased taxation or both
The calls on tax revenues to finance welfare would be diminished if people received a just wage as is called for in Catholic social teaching.
