Episode Transcript
[00:00:00] This Torah portion is teaching us about laws of charity and by extension laws of taxation.
[00:00:11] In the US when you pay your taxes. So part of your taxes are going to infrastructure rebuilding, roads and police and military and all other benefits which you are getting from the government on various levels, local, state, federal, and part of taxes are going to that, and part of the taxes are going to what they call entitlements, safety net for people who cannot afford to pay for things themselves. Welfare, Medicaid and other things like that.
[00:00:46] So in the Torah, the two are separated.
[00:00:49] In the Torah there are laws of taxes and separately in the Torah there are laws of charity. And they are separate.
[00:00:58] Taxes are not charity and charity are not taxes.
[00:01:01] About 37% of all of the taxes that Americans pay go to what Torah would describe as charity because it's going to all of the safety net programs for people who cannot afford it and the rest is going to service you or community at large. So in other words, according to the Torah, a tax is only something that community pays for its own embeddlement.
[00:01:30] So when you pay money for police or for protecting your country, for building roads or for improving infrastructure, these are, according to the Torah, these are taxes.
[00:01:42] If you are paying for someone to have money who doesn't have any resources, welfare, Medicaid and food stamps and stuff like that. Now it is also important. The Torah is telling us we need to support the needy. But it's not called taxes, it's called charity.
[00:02:00] There's only one. Many people ask me one second. So, Rabbi, if 37% of all the money that I pay is going to entitlements, is going to helping the needy, then maybe I can write it off as my charitable contribution.
[00:02:16] The Torah is obligating every single Jew to spend at least 10% of his income embedded 20% of his income, if he can afford to charity, right?
[00:02:26] So somebody would say, one second, let's do the math.
[00:02:29] My tax, between state and local taxes and federal taxes, I'm paying, let's say, 35% of my income to the government, right?
[00:02:38] So out of this 35%, 1/3 or even more is going to entitlement to safety net.
[00:02:46] So it is 1/3 of my 35%. It's already 10%. So here I go. I'm fulfilling my obligation, according to the Torah, to pay charity.
[00:02:55] So what does every rabbi tell you? Every rabbi will tell you, doesn't work like this. Why? Because the whole idea of charity, that it has to be voluntary, the very fact that the IRS is coming to you with Figuratively a gun to your head saying give me this money is making it not charity. Because the whole idea of charity, that you should give it on your own volition from your own heart. That's the whole point.
[00:03:21] And just as a caveat, there is a story about this, that in the town of Berdichev in Ukraine, once upon a time this town had the second largest Jewish community of Russian empire. The largest one was in Odessa. As you could probably imagine yourself. The second largest was in Berdichev. And the rabbi Berdichev was very perturbed about being pulled in all directions by different committees that he had to sit on in order to govern the city. So the rabbi said that if you'll make any new rule, then you call me, otherwise don't bother me. So they decided to make a rule and they said, you know what? This town has a lot of people who are going around knocking doors, collecting for money.
[00:04:04] So let's make a new rule that because people don't want to be bothered by different charity collectors, we're going to make one central fund where everybody will pay into and it's going to be much easier. Nobody's going to be asking for money. So we'll make a new rule like this. So they call on the rabbi for a meeting about this new rule that they want to enact.
[00:04:22] So the rabbi is listening to this proposition and he says, I told you to call me only when you make new rules. They said, yeah, it's going to be new rule. He says, that's not a new rule. This rule already existed. He says, where did it exist? Said it existed in the city of Saddam.
[00:04:36] Heard about City of Saddam. City of Saddam was known for its Darwinian social policy.
[00:04:42] City of Saddam was known for not allowing by law to give charity. By the way, just like it was in the Soviet Union. The laws in Soviet Union were not allowing to give charity because everybody was supposed to be self sufficient.
[00:04:54] So the city of Saddam was like that. So the rabbi of Berdichev, Rable Vitro of Berdichev, said, when you are making a central fund and you are not allowing people to voluntarily give money directly to those who are in need, you are creating a law just like in the city of Sodom.
[00:05:07] Because the Torah is telling us that charity is what we give ourselves voluntary to the people in need.
[00:05:15] So here is a very interesting law about taxation. The Torah is telling us that parenthetically for 2000 years Jews lived in other countries and in many countries Jews had autonomy and self governance, in other words, government, the local government was not mixing into the life of Jewish community.
[00:05:35] And very often the Jewish community had to pay tax from as a community, the government was like saying, you pay us a tax.
[00:05:45] So the local government was telling the Jews, you pay us tax as a community and we don't care how you collect this tax.
[00:05:53] So the Jewish community had to pay local government's taxes, but not individually, but as a community and for the whole community needs, they had to raise their own taxes. So the Jewish law has developed a lot of rules about the taxes, how this tax is supposed to be collected, and also laws about charity, about supporting their own.
[00:06:14] And one very interesting thing that we notice about Jewish laws about taxes.
[00:06:19] So the law is very interesting.
[00:06:22] The law is that taxes are collected from individuals. Jewish law doesn't have corporate taxes.
[00:06:29] So only once if you own a company, once you put the money from this company into your own pocket, this one becomes a taxable event. Otherwise it's not taxable. And it's very interesting, we notice it in modern economy. Why is it? Because corporations really don't pay taxes. Their clients pay their taxes.
[00:06:50] If I manufacture a pencil, and this pencil cost me a dollar to manufacture and then I want to make 10 cent income on this pencil, I'll charge you $1.10. Now if government comes and it says it's going to collect another 10 cent tax on my pencil, right? So what do I do? I'm selling it now for $1.20.
[00:07:13] I'm not going to pay the 10 cents from my own pocket. If I'll pay 10 cents from my own pocket, I'm going to going to diminish my own returns. I'm going to make nothing.
[00:07:21] So I'm going to increase the price of the pencil.
[00:07:25] So who is going to be paying this tax? Not me, my customer who is a private individual. Right?
[00:07:31] And if my customer is a business entity that produces something, then my customer who is a business entity is going to pass on this charge to someone else. Why? Because a business that makes money can always pass on any expense.
[00:07:48] Because an individual can never pass. If I am buying a can of Coke for myself and this can of Coke went up in price, I have a choice only to buy it or not to buy it. If I don't have a choice of passing this expense onto someone else.
[00:08:04] But a business always has a choice to pass on this expense to someone else to their customer.
[00:08:10] So this is why in the Jewish law the only thing which is taxable is individual, never corporation.
