In the King James version of Luke’s Gospel, it states that Caesar Augustus made a decree that the whole world should be taxed, and that this taxation occurred during the time when Cyrenius was governor of Syria (Luke 2:1-2). The problem with Luke’s statement is that most historians would disagree on several counts. First, Cyrenius (Quirinius) wasn’t governor of Syria until cir. 6-7 AD, several years after the death of Herod the Great, whom Matthew claims was reigning at the time of the birth of Jesus (Matthew 2:1), as does Luke, who ties both infancy narratives together, showing John was only 6 months older than Jesus (Luke 1:26, 36), and Luke introduces Caesar’s decree by saying: “It came to pass in those days…” (Luke 2:1) i.e. in the days of Herod, the king of Judea (Luke 1:5; cf. Luke 1:39).
Secondly, Herod directly taxed the Jews, but Caesar Augustus didn’t do so, until he annexed Judea and Samaria and added them to the province of Syria in cir. 6 AD. During the reign of Herod the Great, Herod paid an annual tribute to Rome out of his own funds. While from time to time there may have been a Roman presence in Judea, Herod concerned himself with the mundane affairs of state throughout his kingdom. Therefore, a universal taxation of all the people of the world by Rome is historically incorrect. What can we say of these things?
First of all, it is the King James translators who are wrong about Luke’s account. Luke is correct in what he claims, but he is misunderstood by many—both translators and many scholars who otherwise interpret his narrative at this point. The word translated taxed in Luke 2:1 is apographo (G583) and should be properly translated enrolled. While people were enrolled for the purpose of taxation, this was not always the intended use of the word. Censuses were taken for reasons other than for taxing, and Luke’s intended meaning is lost in the presumption that he has taxation in mind.
On February 5th in the year 2 BC Caesar Augustus was awarded the title Pater Patriae (Father of the Country / Nation) by the Senate. This coincided with his silver jubilee as Princepts (Emperor) of Rome and the 750th anniversary of the founding of Rome. This was a great year of celebration throughout the empire, but especially in the city of Rome, itself. One can safely conclude, therefore, that the preparation for such a celebration went on for several years. This was true for celebrating Augustus’ silver jubilee and his award of being named Pater Patriae, as well—the final thing he records in his Reg Gestae, as if to say it was the most prestigious honor ever given him:
35 While I was administering my thirteenth consulship the senate and the equestrian order and the entire Roman people gave me the title of Father of my Country, and decreed that this title should be inscribed upon the vestibule of my house and in the senate-house and in the Forum Augustum beneath the quadriga erected in my honor by decree of the senate. At the time of writing this I was in my seventy-sixth year. [emphasis mine]
Suetonius also records Augustus receiving this award given him by the Senate and all the Roman people (or the people of the Empire) in his Twelve Caesars:
58 The whole body of citizens with a sudden unanimous impulse proffered him the title of Father of his Country: first the commons, by a deputation sent to Antium, and then, because he declined it, again at Rome as he entered the theatre, which they attended in throngs, all wearing laurel wreaths: the senate afterwards in the House, not by a decree or by acclamation, but through Valerius Messala. He, speaking for the whole body, said: “Good fortune and divine favor attend thee and thy house, Caesar Augustus; for thus we feel that we are praying for lasting prosperity for our country and happiness for our city. The senate in accord with the people of Rome hails thee Father of thy Country.” Then Augustus with tears in his eyes replied as follows (and I have given his exact words, as I did those of Messala): “Having attained my highest hopes, Fathers of the Senate, what more have I to ask of the immortal gods than that I may retain this same unanimous approval of yours to the very end of my life.” (emphasis mine) [SUETONIUS: The Lives of the Twelve Caesars; book 2; section 58]
Both Suetonius and Augustus Caesar record that the whole Roman population was involved in giving the title Pater Partiae to Augustus. If this was so, there had to have been a census involved. Moreover, this census would have had to have been conducted in the year prior to February 5th of 2 BC in order to be used in honoring Caesar at the formal celebrations. Such an empire wide census was indeed taken, where the citizens of the Empire registered their names as a token of their oath of loyalty or obedience to Caesar, as an archeological inscription dating to 3 BC states:
…(and) the same oath was sworn by all the people in the land at the altars of Augustus in the temples of Augustus in the various districts.” (emphasis mine) [Lewis & Reinhold, Roman Civilization, vol. II, pps. 34 and 35, Harper Torchbooks Edition.]
The oath was sworn by all the people of the land (i.e. the Empire), just as Luke claims Caesar’s decree for an empire-wide enrollment was conducted (Luke 2:1). The oath of loyalty was recorded at the altars of Augustus in the various districts (or provinces, such as Syria). In the lands of the Jews the oath would have been taken in the synagogues throughout Herod’s kingdom.
 Luke’s statement as interpreted by the KJV translators