As with many other questions in Catholic social thought and teaching, a logical starting point is the work of St Thomas Aquinas.
André Azevedo Alve
Associate Professor at the Catholic University of Portugal’s Institute for Political Studies and the Director of the Institute’s research centre.
Approaching the tradition of Catholic social thought on taxation is not an easy task as the subject did not historically merit detailed treatment in the works of key authors in this tradition. As with many other questions in Catholic social thought and teaching, a logical starting point is the work of St Thomas Aquinas. While the theme of taxation was not analysed in detail by Aquinas, it is nevertheless possible to identify some key insights from his work.
Firstly, Aquinas recognised that, although undesirable, taxation may be necessary and legitimate in cases where the rulers do not have sufficient means to provide for “common utility”:
“You asked whether it is licit for you to make exactions from your Christian subjects. In regard to this, you ought to consider that the princes of the earth were instituted by God not to seek their own gain, but to look after the common utility of the people… For this reason the revenues of certain lands were established for princes, that, living on them, they might abstain from the despoiling of their subjects… Yet it sometimes happens that princes do not have revenues sufficient for the custody of the land and for other duties which reasonably fall upon them; and in such a case it is just that the subjects render payments from which their common utility can be cared for. And thence it is that in some lands, by ancient custom, the lords impose fixed taxes on their subjects, which, if they are not immoderate, can be exacted without sin… Wherefore the prince, who serves the common utility, can live on common property, and can look after the common affairs either from his assigned revenues or, if they are lacking or insufficient, from those which are collected from individuals.” (Thomas Aquinas, De Regimine Judaeorum (trans. E. Lewis, Medieval Political Ideas, 1954), p. 111
If princes could provide for themselves through revenue from their own property, this would be preferable but, considering that would not always be feasible, “common utility” and the fulfilment of duties that “reasonably fall upon them” may justify princes obtaining regular revenues through the imposition of taxes on the population. It is, however, important to note that Aquinas qualifies the legitimacy of taxes by their moderation. So, for Aquinas, the same principle of “common utility” that justifies the legitimacy of taxation (and that one could reasonably argue is more present in contemporary societies than was the case in Aquinas’ time) also imposes a duty of imposing moderate taxes. And this is not simply a recommendation but rather a serious condition for the legitimacy of taxation since, in Aquinas’ judgement, it is in fact only moderate taxes that can be “exacted without sin”.
This whole discussion may seem rather antiquated. Modern states do not generally have independent sources of income which they then, in the way described above, supplement via taxation. However, some general principles can be extracted. It is the duty of governments, whether democratically elected or not, to undertake certain functions to promote the common good. The state needs resources to do that. The taking of those resources in taxation involves the state taking the property of its citizens, but that is appropriate if taxation is moderate and the proceeds are used for the legitimate functions of the state.
Thus, a more general – but indirect – case for taxation can be made in a Thomistic framework if one considers that rulers have a duty to promote the common good by enacting legislation that is in accordance with right reason and natural law and that, in accordance with natural law, private property is subordinate to the universal destination of goods. This implies that, in circumstances where it can be reasonably ascertained that protecting and promoting the common good requires imposing taxes by legitimate authorities, such taxes can potentially be deemed necessary. In turn, Aquinas’ views on justice (which largely build upon Aristotle) also indirectly impose duties of proportionality and moderation on the political authorities that impose taxes.
The late scholastics were a group of largely Iberian scholars who followed the method of St Thomas Aquinas. Their main work took place in the 16th and 17th centuries. Much of it focused on the practical pastoral challenges that arose from the development of the Spanish and Portuguese empires. They reflected upon the rights and duties of monarchs, human rights and slavery, property rights, just prices and the problem of inflation arising from the discoveries of silver and gold. Their work has been highly influential in the development of Catholic social teaching, and important figures such as Bartolomé de las Casas and Francisco de Vitoria live on in the names of universities and research centres (including the Las Casas Institute at Blackfriars Hall, University of Oxford).
The late scholastics further developed the Thomistic framework for thinking about the rights and duties of the state, reflecting upon taxation and public finance, amongst other issues. They regarded taxation as an acceptable means for legitimate governments to raise revenue for their necessary expenses. Simultaneously, they issued acute warnings about the need for moderation on public expenditure and the grave dangers associated with the mismanagement of a country’s public finances.
In the words of the Spanish Dominican priest and late scholastic philosopher, Domingo de Soto: “… rulers who oppress their peoples with taxes and that demand them not for a legitimate cause, but because of hate or in order to hand out benefits and favors, are reprehended not only by philosophers and historians, but also by the sacred books.” (Domingo de Soto, Book III, Q. VI, A. VII (quoted in A. A. Alves and J. Moreira, The Salamanca School, 2013), p. 84)
Soto additionally warned that rulers will have a tendency for “demanding taxes in greater quantity than the state needs” and argued for proportional, rather than progressive, taxation on the grounds that “one should pay as much more as more abundant riches he possesses and more profits he reports”. It should be noted that, in a modern tax framework, exemptions from tax will often be given for income up to a certain level and this can vary according to family obligations. If a uniform rate of tax is paid on income above this level, the system will, in fact, involve the rich paying more as a proportion of income than the poor. Soto also warned that if public expenditure is not contained, the population will end up being oppressed through excessive taxation: “as the need of the king’s expenditures grows from day to day, the people is also molested from day to day with many taxes.”
It should not be thought that these ideas simply apply to ancient times when rulers were not democratically elected. It can still be inferred that it remains wrong in democracies to vote for programmes that involve the imposition of taxes on others to benefit one’s own causes unless these can be objectively justified in the light of the common good.
he Catholic social thought tradition also provides important insights on taxation in extraordinary circumstances, such as times in which a country suffers a foreign military invasion or when a natural catastrophe occurs. Aquinas explicitly distinguished between taxation in ordinary circumstances and in these exceptional moments:
“… the same reason seems to apply if some new situation arises in which it is necessary to spend more for the common utility… for instance, if enemies invade the land or some such situation arises. For then, in addition to the accustomed exactions, the princes of the lands can licitly exact from their subjects some payments on behalf of the common utility. But if they wish to exact more than has been instituted, for the sake of having their own desire or on account of inordinate or immoderate expenses, this is not at all licit for them.” (Thomas Aquinas, De Regimine Judaeorum (trans. E. Lewis, Medieval Political Ideas, 1954), p. 111)
Within the tradition of Catholic social thought, it may also be prudent to associate Aquinas’ teachings on taxation in extraordinary circumstances with the late scholastic Domingo Soto’s recommendation for rulers to observe the rule that “as soon as the need [that gave rise to a particular tax] ceases, the tax may also cease to be demanded” (Domingo de Soto, Book III, Q. VI, A. VII (quoted in A. A. Alves and J. Moreira, The Salamanca School, 2013), p. 84
It is particularly interesting that several influential late scholastics regarded inflationist policies as a de facto form of taxation – and one that was particularly harmful and unjust. The systematic debasement of money, through governments increasing its supply and lowering its value, has the effect of reducing the purchasing power of the money holdings of citizens and those on fixed incomes whilst generating resources for public expenditure. It was, therefore, regarded as a form of stealth taxation. Economists still see it in this way today, though the mechanisms by which this happens are more complicated and involve central banks.
In line with the justification laid out above for taxation in extraordinary circumstances, inflation was to be tolerated in times of great crisis but persistent inflationary policies that led to the continual devaluation of money were gravely condemned. The sixteenth-century Spanish Jesuit and late scholastic Juan de Mariana SJ explained this as follows:
“… we grant the king the authority to debase money without the people’s consent, in the pressing circumstances of war or siege – provided that the debasement is not extended beyond the time of need and, that when peace has been restored, he faithfully makes satisfaction to those who suffered loss.” (Juan de Mariana SJ, A Treatise on the Alteration of Money, Q. III (quoted in A. A. Alves and J. Moreira, The Salamanca School, 2013), p. 132))
Other than in these exceptional circumstances, systematic policies leading to currency debasement and inflation were actually equated by Juan de Mariana with theft perpetrated by public authorities: “The king is not free to seize his subjects’ goods and thus strip them from their lawful owners. May a prince break into granaries and take half of the grain stored there, and then compensate for the damage by authorizing the owners to sell the remainder at the same price as the original whole? No one would be so perverse as to condone such an act, but such was the case with the old copper coin.” (Juan de Mariana SJ, A Treatise on the Alteration of Money, Q. X (quoted in A. A. Alves and J. Moreira, The Salamanca School, 2013), p. 84)
Again, this way of thinking is surprisingly modern. In times of emergency, such as war or pandemic, the need for government to act and to raise finance may be such that the creation of money and inflation might be one method used amongst many during the emergency, but the policy should be rapidly reversed. We can see in the current time that the consequences of this approach are not as trivial as might be imagined – the pain of inflation can be just as great as that of explicit taxation, but it is less transparent and tends to be particularly harmful to those least able to protect themselves from its effects, often the poorest and most disadvantaged in society.
Againstthis background, Mariana advised moderation and recommended that public expenditure be kept by political decision-makers at moderate and proportional levels: “First of all, somehow, court expenditures could be lessened, for reasonable and prudent moderation is more splendid and manifests more majesty than unnecessary and unreasonable consumption.” (Juan de Mariana SJ, A Treatise on the Alteration of Money, Q. XIII (quoted in A. A. Alves and J. Moreira, The Salamanca School, 2013), p. 85)
The first modern social teaching document of the Catholic Church, Rerum Novarum, was published by Pope Leo XIII in 1891. One of the drafters of the document was Matteo Liberatore, though his work was amended. Both Liberatore and Leo XIII were students of Taparelli d’Anzeglio who had worked to improve understanding of the work of St Thomas in the Church. Leo XIII followed St Thomas and the tradition of scholastic thought by emphasising the importance of virtuous government in promoting the common good. At the same time, he emphasised that the state should limit the extent to which it taxed the resources of families:
“These three important benefits, however, can be reckoned on only provided that a man’s means be not drained and exhausted by excessive taxation. The right to possess private property is derived from nature, not from man; and the State has the right to control its use in the interests of the public good alone, but by no means to absorb it altogether. The State would therefore be unjust and cruel if under the name of taxation it were to deprive the private owner of more than is fair.” (Rerum Novarum 47)
Of course, this raises the question of what is “fair”. Certainly, taxes should be levied on the basis of ability to pay. However, Pope Leo also expressed the view, strongly, that a wide range of bodies had responsibility for the provision of welfare and that the state’s role should be limited. Pope Pius XI furthered this line of reasoning in the 1931 encyclical, Quadragesimo Anno, invoking the teaching of Leo XIII: “Wherefore the wise Pontiff declared that it is grossly unjust for a State to exhaust private wealth through the weight of imposts and taxes” (Quadragesimo Anno 49). At the same time, Pope Pius emphasised, beyond all doubt, the responsibility of the rich to support the less well-off through charity. Firstly, he noted that the obligations of the rich to use their property for the benefit of others went well beyond their obligations in law. Secondly, he stressed that the obligations in this respect were serious: “Rather the Sacred Scriptures and the Fathers of the Church constantly declare in the most explicit language that the rich are bound by a very grave precept to practice almsgiving, beneficence, and munificence” (Quadragesimo Anno 50).
Later encyclicals have incorporated different perspectives on the role of the state in the financing of welfare, healthcare and education, and are less sceptical about this than earlier teaching. Welfare, healthcare and education make up the bulk of contemporary government spending and, hence, lead to the need for substantial taxation. This modern teaching does not negate earlier teaching. Pope John Paul II, Pope Benedict XVI and Pope Francis have, in their different ways but all in line with earlier teaching, criticised the state taking over society’s role in the provision of welfare, called for a renewal of the principle of subsidiarity and expressed concern about a ‘welfare mentality’. This remains contested space and the principles of Catholic social teaching might well be applied in a different way in different practical contexts. The late scholastics understood this well. However, in summary, we can distil the following general principles regarding taxation:
Overall, we can say that the analysis of the late Iberian scholastics in matters of public finance and taxation combines a realistic anthropological approach with a sophisticated theoretical framework and a scepticism about the workings of government given our fallen nature. Their work resulted in many insights and contributions that were advanced for their time and, indeed, even can be regarded as being advanced when judged by contemporary standards.
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Chapter Three: Taxation in Sacred Scripture >
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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.
The late Pope Francis drew attention to the problems associated with a system that fosters inequality
The Church, from her origins, was a movement of the poor and the powerless. The fact that her founder, Jesus Christ, was born in poor circumstances necessarily made concern for the poor one of its founding commitments.
