THE JERUSALEM INSTITUTE OF JEWISH LAW 
Rabbi Emanuel Quint, Dean

Lesson # 123 (part three) • Levying Taxes on a Community

As in prior lessons, the term “community” means the Jewish community, living under the control of the secular rulers of the country or province. 

In all of these matters, if there is a custom in the community regarding who is considered a resident of the community for tax purposes, the custom is controlling. 

If a person becomes subject to a tax, he may not avoid the current tax by removing himself from the community. This was held to be true even if the taxpayer left his community to go to live in the Land of Israel. He is even responsible for external taxes that were imposed by the secular ruler within thirty days after he leaves the community. The reason is that the ruler generally takes more than thirty days to impose the tax and thus he imposed it based on the number of inhabitants who were in the community within thirty days before the tax was imposed. 

If the community for any reason does not collect or undercollects a tax from one of the residents or nonresidents, there is no statute of limitations and the tax may be collected at any time. 

Those taxes that are allocated for the protection of the inhabitants of the community must be paid by all the inhabitants, including orphans, the only exception being scholars of the Torah. The theory being that the scholar’s Torah study will act as his protection. A person is considered a Torah scholar for the purposes of this exemption if his main occupation is the study of Torah in its many aspects. It usually means a person who devotes the majority of his waking hours studying the Talmud and its commentaries. In other matters the Torah scholar must also participate in the payment of taxes. In those communities where members dig sewers and do such other tasks, the Torah scholar is exempt from such work. In some communities the synagogue functionaries are also exempt from some or all of the internal taxes. There are no exemptions from external taxes imposed by the secular ruler on all of the inhabitants. 

The tax that is levied on the community is sometimes a graduated tax, with an increasing percentage tax corresponding to wealth. Where the tax is not graduated, wealthier persons still pay a larger tax than the less wealthy, because even at a flat rate for all persons, the taxable base of the wealthier persons is greater resulting in a greater absolute tax. 

There is also another criterion in levying the security tax where there is a wall around the city. Those who receive more protection from the security services pay a higher tax. Where crime comes from outside the community, those living at the outskirts of the community need more protection than those closer to the hub of the city. Therefore, those closer to the outskirts pay a higher tax than those in the center of the community. Also, since robbers are more apt to rob the rich than the poor, the wealthier persons pay a higher tax than the less wealthy. Combining these two standards, sometimes a wealthy person in the center of town pays about as much as a poorer person on the edge of town. All these issues have to be decided by the Beth Din in the community. In times of war when the walls of the city offer protection the nearness to the walls is not a factor in determining the tax; then the criterion is the wealth of the inhabitants. 

The wealthy members of the community also pay a greater portion of the tax in matters in which they do not receive a greater proportion of the benefit or in which they do not have any need at all. Some examples are: hiring teachers for the children of the community whose parents cannot afford to pay for such education, appointing a cantor for the synagogue, building a synagogue, and building a wedding chapel. 

The community may appoint tax assessors who go out and determine the net worth of the taxpayers. In some communities the custom is for the taxpayer to declare his worth and he takes an oath that the information that he supplies is accurate. In those communities where the assessor determines the net worth, neither the taxpayer nor the community can appeal such assessment. The assessors are admonished to do their work in honesty and trustworthiness, without favoritism, and without dislike for the taxpayer. 

In those communities where it is the taxpayer who makes his declaration under oath as to his worth, if the taxpayer refuses to take such an oath, then the community will appoint assessors to make the assessment. With such appointment of assessors, they are given instructions that if they make an error, it should be in favor of the community. In those communities where the taxpayer declares his worth under oath, he may later amend his declaration even if it lowers his taxes. This may be done only if Beth Din believes the reason for amending his declaration.

Rabbi Yechiel Epstein (1828-1909) in his Aruch haShulhan, Hoshen haMishpat Volume 7, Chapter 163, (This work is not to be confused with the Shulhan Aruch, see lesson 121. In Shulhan Aruch, the word Shulhan comes first. In Aruch HaShulhan, the word Aruch comes first.) writes that the custom of the taxpayer making his own declaration as to his worth under oath is no longer followed. With the increase in population in many communities, the better practice would probably be to permit the taxpayer to make his own declaration and supply the information and be subject to penalties for making a false declaration. 

In determining the wealth of the person so that his taxes can be determined, certain criteria are used.

A person's own net worth is first determined. It includes: (1) any moneys he is holding belonging to others. In determining external taxes based by the ruler on net the worth of the taxpayers in the community, all moneys held for others are included in such tax base. Since the ruler may well think that all assets in the Jewish community belong to the town inhabitants. (2) Any moneys that he is authorized to invest and use in his business. It will include trust funds for his children he is holding for investment, or property of his wife over which he has control. If the investor shares in the investment profits he must also share proportionately in the taxes.

There is also a dissenting opinion that holds that the ruler is aware of the net worth of the citizens of the Jewish community and realizes which assets found in the community belong to outsiders. In many communities accounts receivable and wages earned but not yet paid are also included in a person's net worth, if the amount was a sum that is agreed upon. But if the amount is in dispute it is not included until the amount is agreed upon or is adjudicated in Beth Din. Accounts payable are deducted from the person's net worth. Property held by others for the account of the taxpayer are also included in net worth. Usually a person's clothing, library, and cooking utensils are not included in net worth. Whether or not jewelry is included in net worth depends upon the custom of the community. 

As soon as the tax is assessed or the taxpayer makes his declaration, the amount to be paid becomes a fixed obligation on the taxpayer as of that time. Even if the taxpayer thereafter becomes impoverished, the tax as fixed is due from him. Conversely if the taxpayer thereafter became wealthy, only the tax as fixed is due from him. 

Those people who move into the community after the taxes are fixed do not have to participate in the payment of external taxes for current year, but do have to participate proportionately in internal taxes. 

It is assumed that all communities have precedents to follow in these matters and such precedents should be followed. 

With this lesson we have concluded a short glance at the laws dealing with community taxes.

The subject matter of this lesson is more fully discussed in Vol. V, Ch.163 of A Restatement of Rabbinic Civil Law by E. Quint, published by Jason Aronson, Inc. and on sale at local Judaica bookstores. 

Questions to quint@inter.net.il