In light of what was written in the first discussion prompt, how has your interpretation of corporate
taxation in light of biblical principles changed, solidified, or not altered? Included in the response, explain
how the “gray areas” of taxation are impacted by biblical principles.
Discussion 2 ACCT 618
We study in the Bible the laws of the land in which God has instituted on his people to guide them on
this Earth. We learn that he is “the way, the truth, and the light,” and that glory and exaltation cannot be
obtained unless we follow His teachings. The same that his teachings are guidelines and safety nets for
us in our daily lives, the scriptures provide insight to give the institution of government the rights to tax
to maintain order. Without that order, there is unfairness, corruption, and a lack of punishment or
consequences. We know from passages in the Bible that the government has the right to tax its people.
In Romans chapter 13 states, “for this cause pay ye tribute…render therefore to all their dues: tribute to
whom tribute is due…”. The Bible does not however say what entities are entitled to be taxed nor at
what percentage is a fair tax.
Business entities are created based on the type of business that is being conducted or based on the goals
the partnership would like to meet. A corporation is a type of legal business entity that is considered
separate from its owners and “coming together to achieve certain goals” (Iyer, 2006). It provides a
protection of liability for those owners from certain activities that the business might be engaged in but
““federal tax law determines whether an organization is treated as a separate entity apart from its
owner(s) for federal tax purposes” (Swenson, 2020).
The Bible teaches us that we are to be the stewards of our own property, giving evidence that man-not
the government-has the right to their property. The eight commandment, “thou shalt not steal” (Exodus
20:15) further protects those rights to property and stewardship, that the government must respect
what is yours and tax it appropriately based on the laws of proportion, of which the theology of separate
entities allows for fairness and conscious tax planning. In Biblical times that proportionate tax was a flat
tax rate unlike current American tax laws. While individual tax brackets increase with the size of taxable
income, corporate tax rates remain the same. Deductions allow for businesses to reduce their taxable
incomes, and ownership percentages can also influence a fair tax advantage.
The interpretation I had on the protection and benefit that stockholders can receive from their
corporations was solidified in this course, but choosing a corporation is not for everyone and their
business needs. The value in having separate entities to chose from not only benefits the taxpayer, but
also provides a unique interpretation to the tax law that can represent fairness and equality. Different to
a corporation, that does not meet the one size fits all mentality, the gospel of Christ is available for all to
take part in. The ultimate tax for the safety of our souls had to be paid for us to gain our eternal
salvation. As his brothers and sisters united, we receive the benefits of his sacrifice and he paid for the
sins of the world and gave us hope from our transgressions. This grace is available to all of His children
with an open invitation to accept him and seek forgiveness of our sins.
References
John 14:6. The Church of Jesus Christ of Latter-day Saints. (n.d.). Retrieved from
https://abn.churchofjesuschrist.org/study/scriptures/nt/john/14?lang=eng
Romans 13:6-7. The Church of Jesus Christ of Latter-day Saints. (n.d.). Retrieved from
https://abn.churchofjesuschrist.org/study/scriptures/nt/rom/13?lang=eng
Iyer, A. A. (2006). The missing dynamic: Corporations, individuals and contracts. Journal of Business
Ethics, 67(4), 393–406. https://doi.org/10.1007/s10551-006-9032-6
Swenson, Michael C. "Classifying business entities under the check-the-box regulations." The Tax Adviser
May 2020: 348+. Business Insights: Global. Web. 4 Nov. 2021.
Exodus 20:15. The Church of Jesus Christ of Latter-day Saints. (n.d.). Retrieved from
https://abn.churchofjesuschrist.org/study/scriptures/ot/ex/20?lang=eng
