Justin Thacker writes: The spirit of the law matters. It seems obvious to say that but, in doing so, I’m not referring to the third person of the Trinity, I’m referring to the unwritten, uncodified aim or purpose of our legal instruments—especially as they relate to taxation. Of course, both Jesus and Paul recognised the significance of the ‘spirit’ of the law in respect of the Torah. When in the Sermon on the Mount, Jesus repeatedly said ‘You have heard that it was said, but I say unto you…’, he wasn’t replacing one law with another—he was directing us to its aim or purpose. Indeed, in Matthew the relevant section begins with Jesus’ clear affirmation that he had not come “to abolish the law” but to “fulfil” it (Matt 5:17). In setting out then how both anger and adultery are matters of the heart, as much as actions in the flesh, he was pointing out, amongst other things, the intention of the legal code.
As numerous commentators have pointed out when the Torah said “an eye for an eye” it was not a prescriptive command for what must happen, but rather a limit to what can happen – no more than an eye for an eye. In similar vein, Paul also recognises the importance of what we might call ‘the spirit of the law’. In letter after letter he tells us to look not so much at the legal code, but at what its aim or intention was. In places, this was to reveal our sin (Rom 7:7), in others it was to show our need for Christ (Galatians 2—3), and still in other places it was to provide an ethical framework which is fulfilled in love (Gal 5:14). The point, though, is that the law had a purpose which moved beyond its legal codification.
I say all this because in regard to tax justice, and in particular the issue of tax avoidance, there are some Christians who seem to think that the legal code is all that matters. In a debate in the Church Times concerning tax avoidance one correspondent wrote:
The idea of tax legislation’s having a “spirit” is pure fantasy. It is true that those who design legislation have a purpose in doing so.
However, the author then continues:
There is no reason at all why citizens should endorse the purposes of bureaucrats, governments, and legislators in drafting, sponsoring, and passing legislation.
He or she goes on to equate such avoidance with legitimate “tax planning”. So what is tax avoidance and what does it have to do with the spirit of law, and how should we as Christians respond?
There are two concepts that are relevant here. The first is tax evasion—that is, illegal non-payment of taxes that are owed. We could also call that fraud. There is also however tax avoidance. According to both parliament and HMRC, tax avoidance is the intentional thwarting of the spirit or intention of tax legislation. It might not technically be illegal, but as the House of Commons library states:
Tax avoidance involves bending the rules of the tax system to gain a tax advantage that Parliament never intended. It often involves contrived, artificial transactions that serve little or no purpose other than to produce this advantage. It involves operating within the letter—but not the spirit—of the law.
Such behaviour should not be confused with tax planning—which is arranging one’s tax affairs in line with the intention of legislation. Examples could include gift aid for charities, ISAs, or pensions. Of course, we might disagree with the legislation that enables ISAs, and there are good reasons for doing so, but we are not engaged in tax avoidance if we participate in them.
The question then is how should Christians think about such behaviour? Is it our role to pay heed to the ‘intention’ of parliament, or should we, as the Church Times correspondent suggests not bother to adhere if parliament can’t manage to codify the law sufficiently?
My view is that we absolutely should adhere to the intent of parliament—and there are at least two reasons for doing so. The first relates to the notorious passage in Romans 13 where Paul tells us to be “subject to the governing authorities” (Rom 13:1). Of course, there are a number of different interpretations of precisely what Paul meant—particularly given the fact that at times the early followers of Jesus seemed not to have been entirely subject (Paul escaped from prison, the early disciples preached Christ despite being commanded not to). Nevertheless, apart from some radical Christian anarchists, the general consensus is that at we should obey the secular law for the most part, if not in its entirety.
There might be exceptions—complying with the Nazis for instance—but seeking a tax advantage for oneself gets nowhere near a legitimate reason for ignoring the secular law. In the same passage, Paul actually turns our attention to the issue of taxation:
This is also why you pay taxes, for the authorities are God’s servants, who give their full time to governing. Give to everyone what you owe them: If you owe taxes, pay taxes; if revenue, then revenue; if respect, then respect; if honour, then honour (Rom 13:6–7).
In saying all this, Paul’s point is not that we legalistically follow the letter of the Roman or Pharisaical law, but be ‘subject’ in a much more general sense. This idea is similarly reflected in his instruction to slaves when he tells them to…
obey your earthly masters with respect and fear, and with sincerity of heart, just as you would obey Christ. Obey them not only to win their favor when their eye is on you, but as slaves of Christ, doing the will of God from your heart. Serve wholeheartedly, as if you were serving the Lord, not people” (Eph 6:6–7).
The whole sense is obedience to the spirit, not just the letter, of the law.
But the second reason why as Christians we must eschew all forms of tax avoidance is much more significant. It is simply this: tax avoidance hurts the poor. It is currently estimated that at least $8trn is sitting in tax havens—that is more than twice the amount needed to pay for the global costs of coronavirus. More importantly, let us not forget that the virus disproportionately hurts the poor. Those who are poorer tend to have more severe disease and higher death rates, those who are poorer can absorb the economic shocks of unemployment less well, those who are poorer often live in over-crowded housing with less access to green spaces. It’s relatively OK sitting in the garden of your three-bed semi, but if you’re in a tower block with a 2ft by 6ft balcony, social isolation takes on a whole new meaning. And this does not even account for the devastation that is predicted to affect the global south when the virus hits the urban slums or refugee camps.
It is also estimated that up to $400bn per year is lost to poorer countries through tax dodging by large multinational firms. By way of comparison, the total GDP of Sierra Leone per year is around $4bn. That figure of $400bn is about three times the amount that is given in aid to the global south each year, so for ever $1 we give in aid, approximately $3 leaves the global south through tax dodging, and currently now sits in those tax havens we have mentioned. No wonder that numerous aid agencies and tax justice campaigners have argued that the best way to put an end to global poverty is simply to, in the words of one African campaign, stop the bleeding, that is end the tax dodging and illicit financial flows that ravage that continent.
Here in the UK, the situation is not very much better. Official government statistics reveal that at least £35bn that should be paid in tax each year is not paid. That represents about a third of the total costs of the NHS. Some commentators suggest the tax gap is as much as £90bn per year which, if collected and spent on the NHS, would effectively double its size.
Perhaps more significantly, the currently UK tax system is fundamentally unfair. This is not the result of any single political party but has taken place piecemeal over the years as the wealthy in particular have been much better at lobbying all parties for tax concessions for themselves that leave the poorest picking up the tab. One of the problems we have is that far too often we only think of tax in terms of the headline rates of income tax which are indeed progressive (the wealthiest pay a higher rate than the poorest) but we ignore all the other taxes that affect us (national insurance, VAT, council). These disproportionately affect the poor with the poorest households for instance paying 9% of their income in council tax while the richest pay just 1%. This means that when all taxes are taken into account, and when you allow for the growth in wealth of the richest households, the poorest pay an effective tax rate that is over 40% of their income, while the richest pay just 18%.
This is fundamentally wrong. It’s just not fair.
All of that raises the thorny question of equality, and whether or not complete economic equality should be our aim as Christians. We obviously live in an extremely unequal society. It is true that over the last ten years or so, income inequality has been relatively static but it is has been static at a very high level as, during the 80s, there was huge growth in income inequality across the UK. Wealth inequality on the other hand has simply continued its inexorable rise since the 50s, going up year on year on year. But does this matter? After all, one of our favourite hymns – All Things Bright and Beautiful– appears to even sanction some form of God-ordained inequality. The third stanza reads as follows:
The rich man in his castle,
The poor man at his gate,
God made them, high and lowly,
And ordered their estate.
Now to be fair to Cecil Alexander, who authored the hymn, it is important to spot the comma in the third line which suggests that the point is not that we are created rich and poor, but that all of us are created whether rich or poor. However, it is less obvious how we can explain the fourth line and certainly the hymn has been understood as justifying some form of God-given inequality. But is that right? Does God ordain inequality?
Of course, the resounding answer to this must be ‘no’. In the pages of Genesis we are told that the image of God is conferred on everyone. In the ancient near east, only the supreme ruler bore the image of the god(s), but not in Genesis where everyone male or female is created with the imago dei. Long before equality became the rallying cry of some, it was embedded in our anthropology in Genesis. We are all of equal worth and dignity before God. In light of this, how should we react to the inequality around us? After all, didn’t Jesus say the poor will always be with us?
I think there is a useful parallel with sin here. We all recognise that sin is inevitable, but that does not mean that it is God’s intention. A misunderstanding of this simple truth is why we so often misappropriate Jesus statement that the poor will be with us (Mark 14:7; Matt 26:11; John 12:8). In saying this, Jesus was quoting Deuteronomy 15:11 “There will always be be poor people in the land.” But what we miss is what the Deuteronomic passage goes on to say “Therefore I command you to be open-handed towards your fellow Israelites who are poor and needy in your land.” What we have here then is a both an empirical statement—‘There will always be poor people’—and an ethical imperative—‘Therefore I command you to be generous’. The inevitably of inequality is no more a prescription for passive acceptance than it is in respect of sin. None of us say, ‘sin is inevitable, so why bother doing anything about it’. Yet, for some reason that can be our attitude to inequality—one of the fruits of sin. For as numerous passages indicate our responsibility is to be open-handed, to tackle poverty or as Paul signals to us in respect of the poor in Jerusalem “the goal is equality” (2 Cor 8:14).
This Sunday (14thJune) is Tax Justice Sunday. It’s a time in the annual calendar when we can perhaps step back and consider the way in which our individual and corporate behaviour contributes or not to the common good. On our website at Church Action for Tax Justice we’ve produced a wide range of resources to help you think through these issues both biblically and practically. We have a series of studies for small groups as well as an online church service and sermon you could use this Sunday (or indeed any Sunday), or there is our two minute video which summarises why Christians should be concerned about tax justice. Whether you use these resources or not, can I encourage you to remember Paul’s words in Galatians when in considering the relevance of the law he reminded his readers of this “They only asked us to remember the poor” (Gal 2:10) for in the end that is what tax justice is all about.
Dr Justin Thacker is the national coordinator of Church Action for Tax Justice. He was formerly the academic dean and lecturer in public theology at Cliff College and continues to lecture on a freelance part-time basis at a number of theological colleges. His most recent book is Global Poverty: A Theological Guide (SCM Press)
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