Jews and Taxes

Jewish ethics demand that we be scrupulous in paying taxes.

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In short, Jewish tradition urges us to exercise moral leadership and take responsibility for the moral progress of the world. This means that we cannot shirk responsibility when our actions encourage wrongdoing.

But we should not jump to the conclusion that we should im­mediately boycott or even turn in the suspected tax evader. An equally important principle of Jewish tradition is that we should give others the benefit of the doubt, as the very next verse tells us, "Judge your neighbor favorably." And certainly it is not a mitzvah to be a busybody.

Therefore, Jewish law states that even if someone may seem to be involved in wrongdoing, we do not have to scrutinize his or her activities if a favorable interpretation is reasonable, even if it is less than probable. The example given in the Mishnah is someone who buys an ox during the Sabbatical year. Even though most oxen are used for plowing, which is forbidden during the Sabbatical year, it is not unusual for someone to buy an ox for its meat. So we may give the buyer the benefit of the doubt and sell him the ox.

Thus, if the cash basis of the business has a reasonable explanation besides tax evasion, we do not need to scrutinize the proprietor's mo­tives. Possible examples: a retail business constantly dealing with small amounts of cash, or someone for whom writing receipts would be im­practical, such as a peddler. (Practically speaking, we must admit that such examples would be fairly rare nowadays, when even small businesses are generally required to have cash registers and issue receipts.)

However, if a permissible explanation is quite improbable, or if the seller admits right out that he is trying to evade taxes, then we must avoid helping. In this case, explain that you will be able to patronize the business only if you can obtain a proper receipt.

In some cases it would be necessary to avoid the business altogether. This is because of an additional problem called marit ayin, or giving the appearance of wrongdoing. If the business in question is well known as one that evades taxes and others can easily see that you are patronizing the business but do not know that you are demanding a receipts then you could be giving the impression of abetting the seller's subterfuge. In this case it would be proper to find a way to publicize your insistence on a receipt, or to avoid the place of business altogether.

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Rabbi Asher Meir

Asher Meir received his Ph.D. in economics from MIT, and received his rabbinic ordination from the Israeli Chief Rabbinate after 12 years of study at Israeli Rabbinic Institutions.