Jesus' enemies want Him arrested and executed, but under Roman rule the Jews are not allowed to carry out capital punishment. They feel Jesus has broken their own law of blasphemy by claiming to be God, but Rome could care less about that. If told that Jesus is going about the countryside claiming to be God, Roman officials would conclude these are merely the ramblings of a mentally ill carpenter from Galilee who is suffering from delusions. They won't take it seriously. The religious leaders understand this, so have decided to try and make Jesus look like an enemy of Rome by getting Him to say something against the government, and in particular to say something against paying taxes. Such a thing earned the death penalty for a man named Judas the Galilean (sometimes referred to as Judas the Gaulonite) who was a leader in the Zealot party and who proclaimed that Israel recognized no king but God. Therefore, Israel owed nothing to anyone but God, an opinion with which Rome harshly disagreed. It is not known exactly how Judas the Galilean was put to death, but the historian Josephus relates that both Judas' sons were crucified, and it's highly likely Judas himself met the same fate.
This is the same Judas mentioned by the Pharisee Gamaliel in the book of Acts when he urges the Sanhedrin to be careful how they treat the followers of Jesus, saying, "Men of Israel, consider carefully what you intend to do to these men. Some time ago Theudas appeared, claiming to be somebody, and about four hundred men rallied to him. He was killed, all his followers were dispersed, and it all came to nothing. After him, Judas the Galilean appeared in the days of the census and led a band of people in revolt. He too was killed, and all his followers were scattered. Therefore, in the present case I advise you: Leave these men alone! Let them go! For if their purpose or activity is of human origin, it will fail. But if it is from God, you will not be able to stop these men; you will only find yourselves fighting against God." (Acts 5:35-39)
Jesus' enemies hope to persuade Roman officials that He is a threat to the government, so they come to Him on the matter of taxes. "Later they sent some of the Pharisees and Herodians to Jesus to catch Him in His words. They came to Him and said, 'Teacher, we know that You are a man of integrity. You aren't swayed by others, because You pay no attention to who they are; but You teach the way of God in accordance with the truth. Is it right to pay the imperial tax to Caesar or not? Should we pay or shouldn't we?'" (Mark 12:13-15a) Their fake flattery is sickening. They address Jesus as Teacher (Rabbi), although we know they don't take any of His teachings to heart. They call Him a man of integrity, although they've accused Him of being a sinner and of receiving His powers from Satan. They credit Him with teaching the word of God in truth, yet they've never missed an opportunity to call Him a blasphemer.
At last His enemies believe they've presented Him with an impossible dilemma. If He says that it's against the word of God to pay tribute to Caesar, they can have Him charged with sedition against the government by claiming He intends to lead a rebellion. Considering He has thousands of followers and His name is as famous as any celebrity's in modern times, Rome may well take this charge seriously, whereas they are likely to ignore His claims to be God. If He upholds the paying of taxes, the religious leaders believe the citizens will turn against Him, for the taxes are so heavy they amount to extortion and robbery in many cases, especially the poll taxes. If He loses His followers, He will cease to become a threat to the religious establishment, for He will either fade into the background like so many "kings" and "messiahs" before Him.
Jesus' brilliance is stunning in its simplicity. He's always practical and easy to understand. "But Jesus knew their hypocrisy. 'Why are you trying to trap Me?' He asked. 'Bring Me a denarius and let Me look at it.'" (Mark 12:15b) Apparently the pockets of Jesus are empty. He has no coin to display for them. "They brought the coin, and He asked them, 'Whose image is this? And whose inscription?' 'Caesar's,' they replied. 'Then Jesus said to them, 'Give Back to Caesar what is Caesar's and to God what is God's.' And they were amazed at Him." (Mark 12:16-17)
The coins of the Roman government declared the divinity of its emperor. On one side the denarius said, "Tiberius Caesar, The Divine Augustus", and on the other side it said, "Pontifex Maximus", meaning "High Priest Of The Roman Empire". Such a thing was blasphemy to the Jews. Such a thing is blasphemy, but since the Jews were living under Roman rule they were forced both to use these coins and to pay taxes back to the government that minted them. They hated using money with blasphemous words and the image of a heathen king on it. They believe Jesus' reaction will most likely be, "There is no God but the God of Israel!"
Bible scholar James Coffman says this about Jesus' wise reply to His enemies, "The stunning implication is that since the money was already Caesar's, there could certainly be no harm in giving it back to him!" Caesar minted the coins. His name and face are printed on them. His government put them into circulation. His government uses the tax money to supply many of the things the Jews enjoy, such as well-maintained roads and law and order. The Roman government, as much as the Jews hate it, actually protects the nation from those around her who would like to see her wiped off the map. Jesus sees nothing sinful in obeying the laws of the land by paying taxes, by giving back to Caesar what belongs to Caesar.
In the same way, Jesus says we are to give back to God what belongs to God. Who gave us our lives? Who gave us minds? Who gave us hearts? Who gave us souls? God did all these things! And we owe them back to Him! In His reply, Jesus clearly recognizes the authority of God over all earthly kings, but at the same time He upholds obeying the laws of the land. Jesus answers in such a way that no one can find fault with Him. Caesar's government rules over the nation politically, but God rules over it spiritually. At the same time the citizens can, with a good conscience, pay their taxes to the one who by military force protects and provides for the nation, and give their worship and allegiance to the God who by supernatural force protects and provides for the nation.
You and I pay taxes to our government. We may not always agree with the decisions our politicians make, but we must obey the laws of the land. The government mints the money, the government maintains many of the things we enjoy and even take for granted, and the government protects us from invaders. We don't like paying taxes, but we owe something to "Caesar" for what "Caesar" does for us.
Above all this, we owe something to the God who gave us life. We owe something to Christ who gave His life for us. We owe something to Him far more precious than money....we owe ourselves.
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