Jewish View on Taxes

Taxes have always been a very divisive issue. In fact, taxes are what split Israel into two kingdoms during biblical times.

When King Solomon passed away, the people of Israel gathered in the city of Shechem for the coronation of his son Rehoboam. Having been burdened with heavy taxes during King Solomon’s reign, the people wished to know what Rehoboam’s policies would be. On the bad advice of his younger advisers, Rehoboam confronted the people with this statement:

My father made your yoke heavy, and I will add to your yoke; my father chastised you with whips, but I will chastise you with scorpion-thorns.1

Hearing these arrogant, spiteful words, ten tribes of Israel dispersed and set up their own kingdom in the northern part of Israel, with Jeroboam, the son of Nevat, as their king. Thus the Jewish nation was split into two, Judah and the Northern Kingdom. (To learn more about this, see The Exile of the Ten Lost Tribes.)

Paying Taxes

Of course, nobody likes to pay high taxes, but at the same time most recognize that it is necessary for any functioning nation or society to have some form of taxes.

Jewish law is clear about the obligation to obey the law and pay taxes.2 One who evades taxes is regarded not just as a common thief, but as someone who offends the community as a whole and “robs the public.”3 The one caveat is that the tax needs to be “just”; it can’t be unfairly levied on a specific race or ethnicity.

(Sadly, such unjust taxes were commonly faced by Jews living in Christian or Muslim lands. Not only did they pay the normal taxes imposed on everyone, but they faced additional taxes specific to Jews. Under the Romans, it was the “fiscus Judaicus”; under the Christians in the Middle Ages, it was the “opferfenning”; and in Muslim countries, it was the “kharaj.”)

Biblical Tithes or “Taxes”

Before discussing any taxation system in Jewish law, it’s necessary to get a sense of the various tithes Jews had to give. Although these aren’t “taxes” in the conventional sense of funds going towards the government, Jews were obligated to pay these dues:

Terumah: a tithe levied to support the priests, who did not own property and devoted themselves to the communal good, including serving in the Holy Temple. According to rabbinic mandate, a fortieth, fiftieth or sixtieth of the total produce (depending on the generosity of the payer) was given.

Ma’aser: an annual 10-percent tithe on agriculture (ma’aser rishon) that supported the landless Levites in their service of the Jewish people. Depending on the year, an additional tenth was given to support the poor (ma’aser ani) or was eaten by the owner in the capital city of Jerusalem (ma’aser sheni). Additionally, there was a ma’aser taken from newborn animals, which like ma’aser sheni was to be eaten in Jerusalem (with portions given to the priests).

Leket, Shikchah and Peah: portions of the harvest that were left for the poor. Leket and shikchah refer to stalks that fell during reaping, or sheaves that were forgotten in the field after harvest. Additionally, a corner of the field, peah, was left untouched by the owner for the poor to harvest for themselves.

Machatzit Hashekel: an annual donation of a half-shekel that every Jewish man over the age of 20 was required to give to the Temple coffers. This was used primarily for communal offerings, but was also used for many communal needs, such as maintaining the Temple and salaries for judges.

Additionally, all Jews had to contribute to the building of the Temple, which could be a one-time donation.

Local Community Dues

In addition to the tithes outlined above, most of which were applicable only in the land of Israel during Temple times, there was another “tax” that the local Jewish communities would gather for the community itself.

This communal tax was collected by the local Jewish community to take care of the poor, as well as other communal needs. The collection would include both money (known as the kupah) and ready-to-eat food (known as the the tamchui). If a person came to a city with the intention of taking up permanent residence, he would immediately be obligated to contribute to all funds.4 If he did not express his intention, then the following guidelines would apply:

When a person has lived in a city for 30 days, we compel him to give charity to the kupah together with the inhabitants of the city. If he dwelled there for three months, we compel him to contribute to the tamchui. If he dwelled there for six months, we compel him to contribute to the fund used to clothe the poor of the city. If he dwelled there for nine months, we compel him to contribute to the fund used for the burial of the poor of the city and the provision of all their burial needs.5

These communal funds were always, and continue to be, part of the very fabric of the Jewish community. As Maimonides writes, “We have never seen nor heard of a Jewish community that does not have a kupah for charity.”6

Taxes for Jewish Education

In addition to the various communal taxes, each member of the community was obligated to contribute to the community fund that went to help pay for the children's Jewish education.

Rabbi Schneur Zalman of Liadi expounds on this in his Hilchot Talmud Torah:

Our sages ordained that the teachers of young children should be paid by communal funds for all the children in the town alike, whether rich or poor. At present, in these countries, it is customary for every individual to pay [tuition] for their own child if they can afford to do so. If a person lacks that capacity, the community is required to pay on his behalf, because of the sages’ ordinance. The poor may compel the rich to pay for [the tuition of] the children of the poor from communal funds. Moreover, even the rich may compel each other to pay the wages of the teachers of their children from communal funds to which even [the townsmen] who do not have children contribute.

For this was the essential point of our sages’ ordinance—to place teachers of young children in every single town, whether large or small, and to place the financial responsibility for the teachers of all the children of the town, whether rich or poor, on all the townsmen, each according to his financial capacity, even on those who do not have children, as it is the rule with regard to other communal levies that are assessed according to each townsman’s financial capacity.

. . . [In places where the above universal levy] is not applied, the rationale is that the rich and even those of intermediate means waive their respective rights. However, they are not entitled to waive the portion due [for the tuition fees of] the children of the poor; everyone must pay for these children until they reach the age of 13.

. . In larger communities, their are voluntary societies that take this great mitzvahupon themselves, contributing the wages for the Torah study of the children of the poor. In places where there is no such society, the communal fund is to be compelled to [take responsibility for this payment].7

Now that we’ve outlined the various tithes and dues that people were obligated to give, we can turn to the concept of taxes in the conventional sense.

Who Pays for Building the Wall

Were Jews taxed according to their income, or was there a flat tax? Were they taxed according to benefits received? Let’s delve into a discussion in the Talmud regarding the appropriate way to tax citizens for the building of a protective wall:

Rabbi Elazar asked Rabbi Yochanan: “When the residents of the city collect money to build a wall, do they collect based on the number of people living in each house, or perhaps they collect based on the net worth of each person?” Rabbi Yochanan said to him: “They collect based on the net worth of each person, and Elazar, my son, you shall ‘fix nails in this’ ( i.e., this is an established law, and you must not veer from it).”

There are those who say that Rabbi Elazar asked Rabbi Yochanan: “When they collect money to build a wall, do they collect based on the proximity of the houses to the wall, so that those people who live closer to the wall pay more? Or perhaps they collect based on the net worth of each person.” Rabbi Yochanan said to him: “They collect based on the proximity of the houses to the wall, and Elazar, my son, you shall ‘fix nails in this.’”8

In other words, there are two opinions about both the question and answer in the Talmud, and based on that, there are two different ways to go about collecting taxes:

  1. It was a question of a head tax vs. a tax based on a person's wealth, and the conclusion is that the tax is based on net worth.
  2. It was a question of a tax based on “benefits received” vs. net worth, and the conclusion is that we tax based on benefits received.

Maimonides understands the second version to be the primary one, in which case we tax based on who will benefit more. Thus he writes:

When a levy is placed upon a city’s inhabitants for the construction of the wall, the levy is made according to the proximity of the houses to the wall. Those whose homes are closer to the wall must pay more.9

Other commentaries, however, explain that the tax system is a bit more nuanced. Tosafot writes that although it is true that the taxes are based on who benefits more, it is partially based on net wealth as well:

The poor who are close to the wall give more than the poor who are far, and the wealthy who are close give more than the wealthy who are far. However, the wealthy who are far give more than the poor who are close, since the wealthy are also assessed by their wealth in addition to their proximity.10

Protection Money

To get a fuller picture of how one should be taxed, Tosafot points to another discussion in the Talmud:

The sages taught: In the case of a caravan that was traveling in the desert and a troop of bandits stood over it in order to attack and pillage it, and the members of the caravan agreed to pay ransom to the bandits, they calculate each traveler’s contribution according to the amount of money he is carrying, and they do not calculate according to the number of souls in the caravan (i.e., the expense is not divided equally among the travelers).

But if they hired a scout who travels in front of them and leads them safely through the desert, the travelers calculate each one’s contribution to paying the scout’s wages evenly, according to the number of souls. And they should not differ from the usual custom of donkey drivers.11

Tosafot explains that in the first incident, it is known that the robbers want the merchants’ belongings but have no interest in actually killing anybody. As such, the payment is based on wealth. However, a group that hires a guide does so out of concern for their own lives, so the payment is based on the number of people themselves.12

While it isn’t always clear where to draw the line, and the details of each case need to be evaluated individually,13 we do see that a distinction is made based on the purpose of the tax. And if it were to serve a double purpose, then there would be a hybrid tax: part of the tax would be per person, and part of it would be progressively based on net wealth.14

Getting Rich Through Taxes

Ultimately, Jewish law recognizes that different societies and situations call for different forms of taxes. As long as the tax is imposed fairly, government entities are free to choose among the various forms of taxation systems, in terms of tax base, such as head taxes vs. taxes based on wealth and property, as well as different ways of grading the taxes, be it a regressive, progressive or proportional tax. Similarly, individual communities are also free to choose the structure of their own taxes.

However, there is one voluntary “tax” or “tithe“ that Jews give regardless of how the local government or society structures things: ma’aser kesafim, a tenth of money.

Unlike the biblically mandated ma’aser mentioned earlier (which applies to agriculture and animals), one gives a tenth of all net profits to charity. Our sages tells us that this “tithe” works in reverse. Although you may be giving a tenth of your net profits away, G‑d promises that “all who are careful with giving a tenth will in turn be themselves rewarded with their own wealth.”15 Thus, although we may call it a tax or tithe, in truth it’s a sound business investment!