Low Income? Net or Gross?
People often ask whether the tithe should be based on gross income or net income. Today, it is your choice as to whether you want to base your tithe on your income before taxes (gross income) or your income after taxes (net income).
However, tithing on gross income (before taxes) is the biblical precedent. Returning to the Summa Theologia, Aquinas notes that
Tithes are due on the fruits of the earth, in so far as these fruits are the gift of God. Wherefore tithes do not come under a tax, nor are they subject to workmen’s wages. Hence it is not right to deduct one’s taxes and the wages paid to workmen, before paying tithes: but tithes must be paid before anything else on one’s entire produce. (II:87)
Aquinas briefly addresses the issue of the poor paying tithes, and concludes that they should, but that the Church also has a responsibility for assisting the poor from tithes received. You can see how if we were faithfully living this out how the Church and poor would both have sufficient resources to meet their needs.
Remember the account of the poor widow who was heroically generous by using the last of her flour and oil to prepare a little cake for Elijah (1 Kgs 17:7-16). After her generous act, the Lord provided enough flour and oil so that she and her son were able to eat for a year.
The words of Pope Leo XIII, in Rerum Novarum — On the Condition of the Working Classes, should provide comfort when he says that “No one, certainly, is obliged to assist others out of what is required for his own necessary use or for that of his family.”
So if your resources are very limited, I encourage you on the one hand to be as generous as you can, while on the other hand to not make imprudent decisions when it comes to your basic needs and those of your family.
Tithing and Catholic School Tuition
Is it appropriate for families to have a portion of their tithe apply to Catholic school tuition? The Church teaches that parents are the primary educators of their children, and providing them with a proper formation certainly falls within the activities described in section 222 of Canon Law noted earlier.
A good decision over whether you should use your tithe for this purpose will depend on your willingness to objectively review your financial situation and apply the virtue of temperance in your financial life. It would be common in our materialistic society for families with sufficient resources to tithe and pay for their children’s education to feel they didn’t have enough resources to do both.
Whatever your income, I would encourage you to take the following steps as you strive to make a decision which pleases our heavenly Father:
• Take another look at your budget and your overall financial position. Even if a family believes that it would be impossible to reduce spending, a fresh and objective look at the situation would be a good place to start.
• Be creative when looking at the cost of educating your children. If your children attend parochial schools, take this opportunity to discuss your situation with the school and investigate the financial assistance programs that are offered. Some Catholic schools offer substantial discounts for larger families. Contact the school and investigate the different possibilities. Have you considered homeschooling? It can be much less expensive than most private schools, especially in the early years.
• If you find the only way you can afford a Catholic education is by using virtually your entire tithe, I would recommend that a minimal amount (for example $5 per week) be committed to your parish via a weekly donation. Our Lord can multiply the amount and at the same time, the visible nature of the gift will provide a good example for your children.
• Once you have analyzed your income and expenses and prepared a budget, place this issue in prayer before the Blessed Sacrament and ask our Lord’s help in making a decision which honors Him.
Investment Gains and Riches
Generally speaking, our charitable giving should be based on our increase. Certainly interest, dividend, and capital gains income are part of our increase, so how should we go about tithing on our investment income? Here are a few items to consider.
On the one hand, there are always current needs within both the Church and society at large that we should keep in mind. There is merit in giving today to help feed someone who is hungry, or meet some other temporal need. There is also a great need to re-evangelize much of the world, and giving resources today so that this new evangelization can be accomplished is also good. So with these thoughts in mind, it would certainly be a good thing to make a current contribution out of the increase in your investments.
On the other hand, if the account is a retirement account, and there would be penalties associated with a distribution, it is certainly reasonable to wait until your retirement years when the distributions are made in order to make your gift.
The founder of one of the companies I worked for is very blessed financially. He is also a strong believer in tithing and has been very generous in the community over the years. He understands that there is a special responsibility that comes with increased wealth, and has often said that the hardest job he has is in determining who he should give to. If you have been blessed financially, you’ll have important decisions to make about the lifestyle you set for yourself, and the amount of giving God is calling you to. In many cases, sacrificial giving would call for generosity in excess of the tithe.
When considering who we should be giving to, Scripture and Canon Law provide helpful guidance. Scripture shows a preference for the poor (Prv 21:13; Gal 2:9-10) and teachers of the faith (1 Tm 5:17-18; Gal 6:6). Canon Law emphasizes the need to give for divine worship, the decent sustenance of priests, apostolic works, and also shows a preference for the poor (Section 222).
Some people fall into the trap of a scrupulous attitude toward tithing, but a greater number are lax in their willingness to increase their charitable giving. Neither of these extremes is what our Lord calls us to. American Catholics give about 1% of their income for charitable purposes. Most families need encouragement to reach for the 10% figure because they have been overly influenced by society’s materialistic attitude. Remember, Pope John Paul II spoke often of how we have become a society of having rather than being. Tithing provides the way to rearrange our priorities and turn our hearts back to God. It is an important tool for overcoming the materialistic attitude so prevalent in our society.
I have seen case after case of individuals seeking happiness through the pursuit of material goods, only to realize that these never lead to fulfillment. Instead, the pressure of maintaining a lifestyle beyond one’s means, especially if it is built on a mountain of credit, often leads to a breakup of the family and even the loss of faith.
People who tithe, on the other hand, find that the worries and anxieties they once had are replaced by contentment as they learn to place love of God and neighbor above their desire for things. They also find that they become much better stewards of the resources God has given them. When families with financial problems such as habitual overspending, high debt levels, and a lack of savings apply God’s principles for handling money, they begin to bring order to what has been a chaotic situation.
The Virginia woman I mentioned at the beginning shared with me what a transformation occurred in her family in just the first few months of tithing. Her husband’s heart was turned back to God, to her, and to their children. That’s what tithing is all about!
Phil Lenahan is Director Finance at Catholic Answers and author of Catholic Answers’ Guide to Family Finances. If you have a question you would like Phil to address, contact him at plenahan@catholic.com.
