Applying Biblical Economics
August 23, 2015 Leave a comment
U.S. presidential candidate Ben Carson recently announced that, as a Christian, he is in favour of a simple “flat tax” based on the biblical system of tithing to replace the present convoluted American tax code.
It is not often that one finds a conservative Republican politician speaking in favor of a massive redistribution of wealth – from the business sector, the “job creators,” to those receiving entitlements, the “takers” to use a current political expression.
So what was actually involved in the biblical principle of tithing, and how would it apply today?
1) The economy of ancient Israel was agrarian, and the tithe was calculated as one tenth of the total produce from the land (grain and fruit as well as their manufactured by-products, e.g., wine and olive oil) and one tenth of the annual offspring of the flocks (Lev. 27:30-33).
Applying the principle to today’s diversified economy, the tithe would include a broader list of things produced from the land, i.e., not only through agriculture but also through resource extraction, manufacturing and so on.
2) It is important to note that the biblical tithe did not represent one tenth of the landowners’ net profits, but a tenth of their total gross production.
Applying this to our present situation, the latest estimate of America’s current Gross Domestic Product (GDP) is $17,985 trillion. A flat tax tithing system would yield just under $1.8 trillion in tax dollars annually.
3) In the biblical system only the landowners (the producers) paid the tithe. Merchants (selling the produce) and labourers (hired to facilitate production) did not owe a tithe.
Under the current system of taxation, it is projected that the total federal and state tax payable by the corporate sector will be $396 billion for 2015. Based on a GDP of $17,985 trillion, corporate taxes would need to go up by 454% to meet the tax levies required under a biblical tithe. Individual taxes on the other hand (currently at $1.818 trillion) would be greatly reduced.
4) What was the tithe used for? In ancient times the tithe supported the priestly class of Levites (who were landless), resident foreigners, orphans and widows (those who had inadequate means for supporting themselves) (Deut. 14:29).
Today the tithe would pay “entitlement” benefits to the elderly, the disabled, the poor and the unemployed (those who do not have the means for adequately supporting themselves).
In keeping with the original purpose of the tithe, revenues for defence, protection services, transportation, infrastructure, education, administration, debt servicing, etc., would need to be collected separately. In the 2015 U.S. budget those costs total $1.868 trillion.
Both individual and corporate taxpayers share in financing these services today. These costs would, therefore, further increase the total taxes to be paid by the corporate sector under a biblical flat tax tithe.
Although Ben Carson says he supports the biblical flat tax system of the tithe, I am not so sure he has thought through the full financial implications of such a taxation model. It is doubtful that the business community would back such a proposition, although individual taxpayers may welcome the corporate sector shouldering a larger share of the total tax burden.
The massive redistribution of wealth produced by a flat tax tithe on production would undoubtedly have major consequences for the American economy. But is it really the kind of tax reform that conservatives are seeking?
Oh … one more thing.
Immediately after prescribing the annual collection of the tithe in Deuteronomy 14, the text continues with the requirement that every seven years all outstanding debts are to be cancelled (Deut. 15:1-2). Applying this biblical principle to our modern economic system would, of course, quickly collapse the banking sector and financially ruin all those who invest in bank stocks, mortgage securities and bonds.
So perhaps one should think twice about applying biblical economic models to modern society. These principles may sound appealing to religious conservatives but are they practical when applied to modern economies?
That might be something else for Ben Carson to consider.
Photo credit: Reuters/Chris Keane