The modern system of taxation probably evolved from the experience of the Church in the 14th century when the papacy was forced to transfer from Rome to Avignon in France. This period which lasted for some decades is often described as the "Babylonian Captivity," in reference to the actual control of the papacy by the kings of France. Cut off from their control of productive lands in Italy, the popes of Avignon devised ways and means to pay for the papal bureaucracy through licenses and dues according to the income of the dioceses. This was a necessity in the beginning, but afterwards this system fell into abuse.
Taxes in Jesus’ time were more of a "tribute," a payment to the conqueror on the part of the conquered. The money went to Rome to be used by the Romans as they wished. There were no social services, no accountability. The Roman bureaucracy spent the money where it wished.
Nationalistic Jews saw the payment of these taxes as an offense to Israel. On the other hand, the Romans, their supporters or those who simply feared their power saw refusal to pay as inciting to rebellion. So when Jesus was asked by the Pharisees and the Herodians about the lawfulness of paying the census tax to the Roman emperor, He was actually put into a trap. Either yes or no would make Him an enemy of Rome or of His oppressed people.
"Then repay to Caesar what belongs to Caesar and to God what belongs to God."
Jesus’ sharp response is, in a trial lawyer’s mind, a gem of an answer. His enemies’ stratagem boomerangs on them.
Jesus’ retort has the tone of righteous indignation. He knows that the Pharisees ask Him with malicious intent. They first praise Him as a truthful Man only to lay a trap on Him. The issue is not really the payment of taxes but their hypocrisy. They use religion to destroy Him.
Jesus, as opposed to the Pharisees, is a Man of integrity, as ironically, the Pharisees themselves accept. And He enjoins His disciples to be men of their words: "Let your ‘Yes’ mean ‘Yes’ and your ‘No’ means ‘No.’ Anything more is from the evil one" (Mt 5:37).
Deep human relationship, whether in friendship, marriage, or any form of commitment, is sustained by goodwill and honesty. People who are transparent are true to their words; they do not praise others for their own advantage. People may not always agree with them, but will always trust them.
Jesus warns His disciples of the leaven of the Pharisees which is hypocrisy.
A hypocrite does not give to God what belongs to God, for God wants a sincere heart. Only an upright heart, only he who does not regard a person’s status, pleases God.
