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Did Jesus believe in the separation of church and state?

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

            This verse is used by many atheists to show that Jesus felt the church and the state should be separate.  Jesus’ response was focused on the question of paying taxes and a believer’s response to government requests.  He was saying to give to the government what the government asks and give to God what God asks.  Jesus said both are important.  He wasn’t talking about separation but obligation to God and country.