Justice and Taxation in Catholic Social Teaching
It would be naïve to act as if there were a time when men were happy to pay their taxes. However, the collection of taxes, in itself, has never been questioned by the Church as a just procedure—and Christ himself, moreover, did not give us much reason to suspect that Caesar ought not to receive his due. And so, although there are too many factors at play for us to dictate what is and is not a just tax rate, we can at least mention a couple of the guidelines insisted upon by the Church in this matter.
a. The justice of a progressive tax system
The first principle, certainly not popular in contemporary ideological schools, concerns the idea that tax revenues ought to be drawn only from those who can afford it, and in greater quantities from those who reap the greatest benefits from the economic system in which they live. In the words of Pius XI’s encyclical, Divini Redemptoris:
“It must likewise be the special care of the State to create those material conditions of life without which an orderly society cannot exist…To achieve this end demanded by the pressing needs of the common welfare, the wealthy classes must be induced to assume those burdens without which human society cannot be saved nor they themselves remain secure. However, measures taken by the State with this end in view ought to be of such a nature that they will really affect those who actually possess more than their share of capital resources, and who continue to accumulate them to the grievous detriment of others.”
Needless to say, the exact application of this principle could take various forms, but one can say without much risk of error that the system known as the “progressive tax” is a fairly straightforward and appropriate means of realizing this goal. And this was precisely the interpretation of the USCCB when it said,
“the tax system should be structured according to the principle of progressivity, so that those with relatively greater financial resources pay a higher rate of taxation. The inclusion of such a principle in tax policies is an important means of reducing the severe inequalities of income and wealth in the nation. Action should be taken to reduce or offset the fact that most sales taxes and payroll taxes place a disproportionate burden on those with lower incomes.”
b. The poor should not pay income tax
A second guideline, related to the first, is that the government ought to exempt those below the poverty line from any income taxes whatsoever, because such families are, “by definition, without sufficient resources to purchase the basic necessities of life. They should not be forced to bear the additional burden of paying income taxes.”
 Mk 12:17; Mt 22:15-22.