Shouldn't there be a separation of church (i.e., religion) and state?
This is an objection that you will sometimes run into (typically from Americans). It means one of two things:
- The civil government should not follow or favor a particular religious viewpoint.
- The civil government should not establish or legally favor a particular institutional church.
Before you get into any discussions on this question, you must clarify which of the above an objector means. The first meaning is probably the most common, but it is philosophically incoherent. If meaning #1 is what your objector is talking about, you have to correct them (gently, please) by showing them the inherently religious nature of civil government.
If your objector means "establishing an particular institutional church with tax money" (a view which is rare nowadays), then you can discuss whether this idea has scriptural support (and it doesn't).
Let's consider each of the above meanings separately.
"Civil government should not follow or favor a particular religious viewpoint"
On this interpretation of “church/state separation”, the word “church” stands for “any religion”, which is usually restricted to mean “any religion that believes in a god.” Of course, there are many religious viewpoints that do not claim belief in a god. For example: Buddhism, Secular Humanism, Transhumanism, Confucianism, Atheism, and Daoism. These are labelled (by non-Christian philosophers) as “nontheistic religions.” Strictly speaking, any belief system claiming to bind a person's conscience or behavior in some way can be properly labeled as a “religious viewpoint.” For example:
Anthropologists now define 'religion' as beliefs about the ultimate nature of things, as deep feelings and motivations, and as fundamental values and allegiances. This definition provides the big picture of how people perceive reality. In this sense, atheistic Theravada Buddhism, Marxism, and scientism are religions.
Once we get the definition of “religion” right, it becomes clear that the first statement above is logically incoherent. Consider the following argument:
- All civil governments enforce laws.
- All laws are grounded in a claim that binds the conscience or behavior of a person (e.g., don't steal, don't murder).
- All claims that bind the conscience or behavior of a person are based upon a religious viewpoint (even if the religious viewpoint denies the authority of YHWH).
- Therefore, all civil governments enforce the claims of a particular religious viewpoint.
Civil government can never be “neutral” with respect to a religious viewpoint, because it -- by definition -- enforces ethical and value claims through law. The legal scholar Leslie Green explains:
The thought that law could be value neutral does not even rise to falsity -- it is simply incoherent. Law is a normative system, promoting certain values and repressing others. Law is not neutral between victim and murderer or between owner and thief. When people complain of the law's lack of neutrality, they are in fact voicing very different aspirations, such as the demand that it be fair, just, impartial, and so forth. A condition of law's achieving any of these ideals is that it is not neutral in either its aims or its effects.
The modern idea of a "secular" (which is supposed to mean "non-religious") civil government actually derives from the "secular"/"religious" dichotomy created by the Roman Catholic church during the rise of the papacy. The legal historian Harold Berman explains:
The papal revolution brought into being, for the first time, a separate, autonomous ecclesiastical state and a separate, autonomous body of ecclesiastical law, the canon law of the church. By the same action it brought into being, for the first time, political entities without ecclesiastical functions and nonecclesiastical legal orders. The papal party gave the names `temporal' (timebound) and `secular' (worldly) to these other political entities and their law."
Legal pluralism originated in the differentiation of the ecclesiastical polity from secular polities. The church declared its freedom from secular control, its exclusive jurisdiction in some matters, and its concurrent jurisdiction in other matters. Laymen, though governed generally by secular law, were subject to ecclesiastical law, and to the jurisdiction of ecclesiastical courts, in matters of marriage and family relations, inheritance, spiritual crimes, contract relations where faith was pledged, and a number of other matters as well. Conversely, the clergy, though governed generally by canon law, were subject to secular law, and to the jurisdiction of secular courts, with respect to certain types of crimes, certain types of property disputes, and the like. 
Sadly, even Protestants have now learned to use this faulty terminology, labeling civil government as a "secular" entity, rather than as "a servant of God, an avenger for wrath upon the evildoer" (Rom. 13:4), which is the proper *religious* function of civil government.
"Civil government should not establish (or legally favor) a particular institutional church"
This interpretation is the older one that would have been familiar to the founders of the “American experiment.” This was based upon the idea of establishmentarianism: that a particular church institution (e.g. the Church of England) would receive tax money and/or exclusive legal support by the civil government. For example, the First Amendment to the U.S. Constitution reads:
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.
We know, historically, what the authors of this amendment meant by the term "religion": it meant "federally-established, tax-supported church organization".
When they wrote the new Constitution in 1787, the authors were creating an overarching governmental body, with new powers over the states. By explicitly limiting the power of this new legislature ("Congress shall make no law") the framers thought they could protect the various forms of Christianity which were already established (some of which were directly financially supported by state governments) from interference by the new Federal government.
The religion clauses kept the national government out of religion not because governmental support for religion was generally regarded as improper -- that was precisely the issue on which the traditional and voluntarist positions divided -- but rather because the religion question was within the jurisdiction of the states. Thus, voluntarists could support the religion clauses because they permitted states to adopt a voluntarist position, as Virginia had recently done. Traditionalists could support the amendment precisely because it prohibited the national government from interfering with states like Massachusetts and Connecticut that adhered to the traditional position favoring established religion.
With the benefit of hindsight, we can see that this clause has been reinterpreted, in modern jurisprudence, to mean something entirely different. But if men are willing to do this with God's word in scripture, we shouldn't be surprised when they do it to the words of mere men.
There *is* a kind of "tax" precedent in Biblical law which certain people might want to use as a model/justification for supporting institutional churches: the census atonement "tax" in Exod. 30:11-16. This fixed (half shekel weight of silver), "atonement" ransom was actually collected and used to support the tabernacle/temple. There are good reasons to conclude that this census ransom was covenantally-bound to the physical temple of the Sinai Covenant. I will address this census ransom in a separate question.
- Hiebert, Understanding Folk Religion: A Christian Response to Popular Beliefs and Practices, p. 35
- Green, Stanford Encyclopedia of Philosophy, "Legal Positivism"
- Berman, Law and Revolution, 273
- Berman, Law and Revolution, 10
- Smith, Foreordained Failure, p. 21