The word reform can have more than one meaning, a fact that has not been lost on politicians. Reform can refer to a mere change of form or it can refer to a removal of faults and abuses. Our political system is adept at the former and very slow and cumbersome when it deals with the latter.
When it comes to taxation, we hear more talk about cosmetic changes than substantial ones. For the most part the discussion focuses on tinkering with the status quo. Real tax reform will never be possible until we are ready to address the problem of government reform. We cannot have tax relief until we are ready to relieve government of the responsibilities we have ascribed to it. Taxation pays for what the government does; it only stands to reason that significantly reducing taxes requires a corresponding reduction in government. On the other hand, asking government to do more is an invitation to higher taxes. Government does things and goes to the public treasury for funds. Not being a business, nor having property of its own to conserve, efficiency and economy are only afterthoughts sporadically and reluctantly woven into some of its activities. Government simply cannot act in terms of a "more with less" mindset. When government takes action with one hand, it takes wealth and rights with the other. If we want to reform our concept of taxes and government, we would do well to consider the Biblical model and American history, for we have lost much of the unique progress that once distinguished us.
The Hebraic Commenwealth
The Hebrew theocratic commonwealth was, despite its rigid religious and moral standard, perhaps the most politically libertarian society in history. Taxation took two forms. The poll tax was required of all adult males (Ex. 30:11-16). Though it was much later called the temple tax (because it was collected at the temple, where the Sanhedrin met as civil rulers), its use was essentially for civil functions. It was an annual, uniform (not graduated) tax, which meant it could not be excessive. Surprisingly, there was an income tax. It was the tithe, and was a tenth of increase or production. What was unique among the Hebrews was that this tithe did not go to civil magistrates but to the Levites, a separate tribe (of whom the priests comprised only a part). These Levites were scattered throughout the nation and performed social, religious, and educational functions. The Levites were, in effect, a private religious, non-profit ministry. Tithing to the Levites was morally and religiously mandated, but no civil penalty was involved for failure to tithe. When God's people failed to tithe, society itself suffered first. Thus, the Hebrews originally had no permanent civil structure and a partially voluntary tax.
There is no property tax at all in Scripture. Land was a family trust that had to be held for one's heirs. This accounts for Naboth's righteous refusal to sell his vineyard to Ahab. Taxation of property implies a prior right by the state to it, and hence the modern penalty for refusing to pay property tax is not criminal prosecution but confiscation.
Hebrew theocracy was an extremely limited government controlled by a voluntary tax. Social functions were performed by society, both family and religious entities. However, this theocracy changed after the demand of the people to Samuel. Perceiving structural weakness in the system (Samuel's sons were dishonest and the people wanted a more military posture toward other nations), the people demanded the establishment of a monarchy.
Before their demand was met, God had Samuel recount the negative consequences of the Israelites' desire for a strong centralized government. They included conscription, large numbers of civil employees, confiscation of wealth, and diversion of resources for the benefit of the government(1 Sam. 8:11-18). God told the people they would complain about powerful government, but that He would not relieve them; there was no going back.
We cannot posit a social order based on the pre-monarchy theocracy. We must recognize that government by man requires something of those governed. Our goal must never be to re-create the Hebrew theocracy, though we must look to Biblical law and advance self-government, voluntary social welfare agencies, and limited civil government in every social and civic context.
The Founders' Understanding
American ideas of civil government came from Reformation theology, medieval feudalism, and English legal tradition. Claims of royal absolution at the beginning of the modern era were a direct threat to the imperfect, but limited feudal structure, which, in turn, had arisen as a reaction to the centralized power of Rome. England took the lead in the advancement of the idea of the rule of law over men, Magna Carta being an early victory. Three major areas of rift between English ideas of rights and American ideas of rights did, however, develop.
First was the desire for religious liberty. This began as a religious stand of conviction by English Puritans and some smaller groups such as the Quakers. Religious liberty was unknown at the time of the Reformation and the demand was primarily religious (reforming the Church of England or, in the case of Separatists and Quakers, the complete independence of churches) and social (immigration to the New World), not political. With the English Civil War religious and social attitudes became political issues. At the same time the Puritans began a huge migration to the New World, much to the dismay of those who wished for them to stay and fight. The American Puritan tradition thus early established the demand for religious liberty. This liberty was not uniform, but that does not mean it was not real. Being separate legal entities, with separate legislative bodies, each colony acted independently to define religious liberty.
A second American development came with the conclusion of the English Civil War. Having fought royal absolutism, Parliament did not deny absolutism to government, but rather transferred its focus from the crown to Parliament. It was the claim to absolutism by Parliament which led it to ignore the colonial legislatures' jurisdictions and attempt control over the colonies that resulted in the American Revolution. The Constitution and Bill of Rights thus clearly reflected an American suspicion that government control would encroach on the rights of the people and the states.
A third American innovation was the demand for economic freedom of opportunity. Long present in the availability of free or inexpensive land, the remoteness of the American scene made their economic development freer than any European nation. When the crown and Parliament attempted, after the French and Indian Wars, to enforce severe trade restrictions and to mold the colonial economics into servants of the English economy, the colonists resisted. Economic opportunity was perhaps more a result of immigration to America than a motive for it. Several generations of Americans had enjoyed extensive economic freedom; they immediately resisted the enforcement of restrictions.
So You Want Tax Reform?
Many factors, political, intellectual, and religious caused changes in American attitudes. The change in government itself happened quite precipitously with the New Deal. Our government became openly socialistic in its taxation spending programs. Obligations to care for others went from being social and religious in nature to civil and political. By means of deficit spending and paper money, public spending could take place first and taxation could then follow. We have since gone from solving our economic problems (or pretending to) to solving the world's problems (or pretending to) by government spending. We are, more than ever, regulated, controlled, and taxed. We pay taxes in so many indirect ways it is difficult to grasp the full extent of our servitude to the state. As Samuel warned the Hebrews of their new king, "[Y]e shall be his servants" (1 Sam. 8:17). Each working American must labor for several months each year to pay his tax obligation. For those months, or for that percent of the year, we are servants of the state.
We may hear of tax reform occasionally, but it will only be a change of forms until we change our government. The United States once had a small national government and low taxes. That period corresponded with our great expansion and industrial revolution. We had no income tax until the twentieth century and for some years only the wealthiest of Americans paid a percent of their income. The massive growth of government and taxation has not provided a corresponding improvement in the American way of life. The improvements we see have been largely technological with only a few traceable to initiative by big government (and those at tremendous economic and social cost). The social problems big government intended to solve by taxation and spending have multiplied faster than our population by a significant margin.
Real tax reform necessitates reforming our concept of government. We must look to Biblical law, but we cannot go back to a Hebrew-like theocracy. This change cannot begin with legislation, but it must begin with a love for freedom and a desire for self-government under God. The small government and low taxes America once had was a development long in the making, and one that came from the character and expectations of its people. Real tax reform will have once again to come from such a source.