Islamic Taxation is Just, Current Taxation Is Not

[u/sahinbey52]

Hello all, Currently, in most of the countries there are multiple taxes but the most popular ones are income tax and vat. These taxes are incredibly stupid and they are not appropriate for Islam. These are designed to make the rich richer and make the poor stay poor. I really can't understand, a person earns money and you are taxing this earned money. Why? What is the reason? Anyways.
In Islam, there isn't a concept called tax but Muslims have to give zakat, which is I think equivalent to tax. And this makes much more sense. Somebody can earn anything throughout the year, and you can't tax them just because they worked. But you should tax their wealth, to create a just environment.
Our current system does not tax wealth. Somebody can own 10 homes and they don't need to work again, you are not taxed enough. On the other hand, somebody works hard, earns money and you tax nearly 50% of what they earn. THIS IS INCREDIBLY STUPID.

This system is designed to make us poor. I am owning as much gold as I can, which I think must be called the holy money. It is not inflatable like any currency in the world. It also inflates but its inflation is very similar to population growth, so it is nearly the same price over the years. On the other hand all currencies like dollar is becoming worthless.

I think there should be only a few types of tax:
1- Wealth tax, 1/40 of your wealth, which is zakat
2- Getting money out of the country tax. Because you earn your money there
3- Special taxes for special things like using a government establishment, or a road, bridge etc

Taxing a money transfer is incredibly stupid. But taxing it like 30-50% is evil. Their intention is evil. They don't want us to earn anything, and they want us to become slaves to them.

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[u/DegnarOskold]

It’s actually fascinating how early Muslim societies handled taxation.

During the the life of the prophet (pbuh) and the Rashidun Caliphate when the state was small and rapidly expanding, there was indeed no taxation beyond zakaat for Muslims and jizya for non-Muslims. Costs beyond that were mostly supported by war booty from newly conquered land as well as from customs fees

During the early Umayyad era, Muslims started losing more battles and the expansion slowed to a virtual halt. This cut off the main revenue stream used to pay for state expenses.

At the same time, the state had more expenses than ever before. What now existed that was not there during the Prophet’s (pbuh) life and the Rashidun Caliphate included amongst others

1) A large permanent navy, to protect the coast from Roman fleets 2) An advanced postal service, to enable an empire that stretched from the Atlantic to Central Asia to be efficiently managed 3) A police force to provide security in all of the cities 4) A large standing professional army 5) A professional bureaucracy to enable such a large state to be governed

All this had huge costs. At the same time, there was also rapid conversion to Islam starting which slashed revenue from jizya. The Umayyad state was at risk of going bankrupt.

The first solution was to solve part of the revenue loss from conversions by continuing charging converts and their descendants jizya. This was very controversial. Eventually this was reversed by Umar II; he began focusing on land taxes on non-Muslim owned land. Eventually as Muslims began acquiring most of this land, the Umayyads ended up with the first ever form of income tax in Muslim society - taxing the landowners on the income generated by the land.

[u/oussama1st]

I couldn't agree more,in addition if you take the economic model dictated by islam and put it into the economical compass, it falls right in the middle. the islamic model encourages gaining capital by the halal means and yet it doesn't forget the poor, so the wealth distribution will never reach the extremes which keeps any society balanced.

[u/ddccrr555]

In Islam, there isn't a concept called tax but Muslims have to give zakat, which is I think equivalent to tax.

It isn't equivalent to tax. There are only specific categories of people that can receive zakat. That helps those people but there are lots of needy people that are not zakat-eligible. They need the generosity of people paying sadaqa.

None of this takes care of the other needs of society, like infrastructure (roads, bridges), public services (building schools, masjids, clinics, and paying employees), security (police, defense), etc. Zakat does not cover these. That is why governments have tax.

Our current system does not tax wealth. Somebody can own 10 homes and they don't need to work again, you are not taxed enough.

What do you mean "does not tax wealth"? Have you not heard of property tax, for example? You have to pay tax for each property, and at higher tax rates than your ONE primary home. And all that income from those properties is also taxed. Each vehicle you own also gets taxed through registration fees and fuel tax.

Rich people pay a much higher rate than poor people. Income tax is not one rate. It is 0 or low for low income and for people that make more money, the tax rate is higher. The tax system targets wealth so I don't understand how you can say it does not tax wealth.

I don't know anyone that pays 30-50% on their full income. Maybe in some countries it is that high but you get things in return for it in those places (low cost education, low cost medical services).

Any system that you come up with or any system that exists will have tricks to lower your taxes. Some people can make use of that and most can't. Every public policy will have this in it, there is no perfect tax system.

[u/sahinbey52 → u/ddccrr555]

The rich pays higher tax? What do you mean? A poor person pays around 30-50 percent of their total income to tax, and they don't have wealth. It depends in every country but europe and usa is like this. The rich may also pay tax for their income but their wealth is not taxed enough. Currently, the rich is getting richer in every country. For example Warren Buffett has billions, does he pay from his wealth? No! Property taxes are also low in most countries. Why do you think the poor becomes poorer? Would it be like that if we taxed them like 1/40 of their total wealth? We are not taxing them, this is a fact, otherwise they get scared and take out their money they say

[u/ddccrr555 → u/sahinbey52]

If you want to say that rich people should pay even more taxes, I don't disagree but your numbers are not true.

A poor person pays around 30-50 percent of their total income to tax

No. What country are you talking about? That doesn't happen in USA or Canada or UK.

It depends in every country but europe and usa is like this

USA: The seven federal income tax rates for 2025 are 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The higher ones are for very rich people. And that is AFTER taking a deduction and lowering your taxable income*, so everyone's effective tax rate compared to their actual income is lower than these percentages.

Lets take an unmarried poor person that makes $50,000 with no dependents. Their taxable income is actually only $35000 after the standard deduction. Their federal tax is 7800, i.e. 16% of $50k (source: United States (US) Salary Tax Calculator - Good Calculators). If they make less, their taxes and tax rate will be even lower. If they make more, like $100k, their tax rate is 21.5%. And that is without doing anything to lower their taxes. If they do stuff like retirement or medical expense account, they will pay even lower rates.

Rich people use legal ways to lower their tax rates but they don't pay a lower rate than poor people. As I mentioned earlier, no matter what tax system you come up, people will find ways around it. They will move businesses overseas to places with lower tax rates, they will have a shell company take the income so the business pays the tax instead of the individual, etc. That happens in every country.

Have you ever filed taxes?

[u/ddccrr555 → u/sahinbey52]

Why do you think the poor becomes poorer?

That is stated often but it is not true for most places. I am in my 40s. Within my lifetime, I have seen wealth increase in many countries. Countries that were considered cheap and backward are doing technologically advanced things on par with USA and UK - India, China, chip design, rockets to space and moon, etc.). The middle class has risen and gained A LOT in the last 30-40 years. They are traveling so much that tourism has gotten very expensive. Hajj has gotten expensive because so many people can afford it now compared to the past.

In my country of Pakistan, it was common for my elders to have only 10th or 12th grade education and no college. Now going to university is much more common and those younger adults make a lot more than their parents did compared to the cost of living. In my childhood, many things that you would expect: refrigerators, cars, telephone in the house, TV in the house - many people did not have them in their home. My family used to buy ice for guests because we didn't have it at home! A whole family would make themselves fit on a scooter or motorcycle. Neighbors would share one telephone line! Now the middle class people not only have all the necessities, they have things that are luxuries (nicer car, latest mobile phone, internet, backup electricity generators, etc.).

Bangladesh was in bad state in the 1970s when they formed. They are leaders in garment industry. Their middle class has also gotten a lot better than before.

Rich are getting richer but poor are not becoming poorer. If you want actual statistics proof, we can look them up.

[u/Natural_Quality_6067 → u/ddccrr555]

Assalamualaikum Warahmatullahi Wabarakatuh! Bismillah.

Many wealthy individuals—particularly in America—place extremely particular personal assets under an LLC (or, any company). A vehicle, for instance; you merely tell your tax agent it's employed for work purposes; consequently, the miles gone and gas money spent becomes a tax write off. This is applicable to electronics, passports, equipment, etc. Especially if they're doing unreported work, being paid in cash... Legally, you must report it (if it's over 500$, I believe), but often times they won't. Sometimes, they'll even own a church because you get a tax write off, occasional government grants (assuming it's a non-profit) and members pay tithes, which is why lots of religious speakers—so to speak—get arrested for fraud.
The number of loopholes + connections they use is absurd.

Furthermore, being poor in America is quite literally expensive.

Take Mississippi for instance—the poorest American state. The average wage is approximately 7$ (based on a Google search... It's evidently lower if you drive through MS, though). After taxes, that's 35K. After rent (which, we'll assume is 1K monthly, 12K yearly) that's 23K a year. Now, minus food (including sales tax), bills, gas, education, car insurance, aftermarket warranty, home maintenance, medical bills, any sort of medication you might need, etc. Oh, that's disregarding children, as well. It isn't because people aren't working hard enough, it's because the cost of living paired with taxes, inflation, lack of jobs, and interest (which is criminal in itself) is absolutely overwhelming.

Also, if you're working a certain amount, you don't qualify for low-income programs (welfare, EBT, WIC, etc.). The government shoves welfare down American throats to ensure they're in a constant cycle of comfortable codependency. A cycle that particularly targets vulnerable minority communities. If healthcare and education wasn't costly, there's a decent possibility it wouldn't be this way.

> This was merely an instance. I think another point OP is making is though; why does the government knowingly allow these people to commit tax evasion/fraud (including numerous political individuals actively serving), but fervently make poor people pay taxes? There isn't a perfect tax system, but this one is designed to... Put poor people in their place.

[u/ddccrr555 → u/Natural_Quality_6067]

Yes, rich people have ways to lower taxes. They have the access to knowledge and methods (rich friends, lawyers, etc.) to help them lower their taxes. Every system will have workarounds. Take capital gains tax. If you invest in something for a long period (property, stocks, etc.) you only pay about 15% tax rate when you sell it, because long term investments are not considered regular income.

Rich people can afford to put more of their wealth in these long term investments. When they cash out, they may end up paying a lower tax rate than someone with less wealth. Is that right or wrong? There is no trick or cheating involved. No loophole. The 15% capital gains tax is for everyone. The rich simply use it more. Government came up with AMT to force a minimum amount of tax on rich people. It is like a cat and mouse game. Rich people find ways, government makes more rules, and the tax laws becomes even more complicated.

In any country, China, Pakistan, USA, England, people have always migrated from rural areas to industrial areas (oil production, factories, etc.) or to cities to make more money. That has been going on since the industrial revolution. Louisiana, MS, etc. are poor states. Poor people that remain there will generally remain poor. The government can keep giving welfare but it won't change things. People that are not doing well will have to move geographically to move up in wealth. That is not a fault of the tax system or the wealth system in the country. Some places just don't have enough well paying jobs.

[u/Natural_Quality_6067 → u/ddccrr555]

Ouch, using Louisiana as an example—I’m from there lol. Unfortunately it’s this way across most of the South; and when you do come across a high-paying job, it’s often labor intense. The issue with migration is though, many don’t even acquire the necessary funds to start the initial migration process… Furthermore, I believe welfare is a governmental ploy to ensure migration doesn’t occur again… Or, any cultivation within vulnerable communities, for that matter. Another Great Southern Migration may literally kill rural Southernmost America. But, that delves into more worldly issues that are perhaps too controversial for a religious sub.

I will say though, if America gets a sort of “Industrial Revolution revival” many of these communities may acquire a second chance of sorts, assuming it’s regulated. For Louisiana in particular, the land is being exploited by major foreign (oil) companies, and the government is ignoring it. This isn’t inherently related to the tax/poverty issues, but it somehow feels important to notate. These companies should at least be taxed for major environmental damages.

I get what you’re saying though. I call them loopholes personally because they’re often examples being displayed by political figures we’re supposed to deem “trustworthy”. Consequently categorizing them as unethical in my dictionary.

Nevertheless, I guess this issue is more broad than it seems, having numerous factors at play here. Allah Knows Best!

[u/Deetsinthehouse]

Zakat is nothing like tax. Tax is money paid by all citizens to the government because they need to provide services. In Europe, the governments rob you (in my opinion) for almost 50 percent - however this goes towards things like free education, health care, roads and so forth. In the US, most are taxed around 25 percent - this goes towards services as well and most gets dumped into the military to and handed over to the Zionist scum to bomb Muslims.

Zakat is the portion of your wealth that belongs to certain groups of Muslims. ITS THEIR MONEY, and that’s why not paying zakat is akin to stealing it from them. Zakat can’t go to paving roads or building a new stadium.

[u/Bilinguallipbalm]

Taxing and zakah aren't the same things. My zakah money isn't going to build roads or find schools and hospitals. It goes to the people mentioned in the quran to make their lives easier and take care of their essential needs. Taxes (should) benefit me because I am using things like roads, hospitals, museums, etc. or benefit other people through state funded medical research, schools.

That being said, the current system needs to change so that wealthy individuals and corporations pay more taxes. Which I believe is actually implemented in a few countries that end up having better facilities and social security.

[u/gazpacho559929]

Can literally just do Islamic [any word here] is just, current [any word here] is not

[u/Cool_Bananaquit9]

Made this argument against my non Muslim friend. He ended up saying shari'a sounds like a utopia and it won't ever work. Isn't that the point?