Taoism and Buddhism were born in the same century. Siddhartha reached enlightenment in approximately 535 B.C. and Lao Tzu’s teachings were recorded around 500 B.C. There are many similarities in the basics of these two religions. Some of the similarities can be seen clearly when examining the three meaning of Tao.
The first definition of Tao is “the way of ultimate reality.” This means that Tao cannot be percieved, defined, talked about, or thought of. It is too big a concept for humans to comprehend. As in the first line of the Tao Te Ching (the Taoist text meaning The Way and Its Power): “The Tao that can be spoken is not the true Tao.” This is very similar to the Buddhist idea of Nirvana or Enlightenment. Nirvana cannot be understood by one who has not attained it. Even when one has reached Nirvana, he cannot describe it to others, but only help others to reach it as well.
In its second sense, Tao means “the way of the universe.” Tao is something that goes through all beings, all of the earth. It is everywhere, all the time. It is something that flows through everything. This flowing idea links with the idea in Buddhism that Nirvana can be reached by anyone, as long as one is devoted enough and has lost all attachments.
Thirdly, one life must be a certain way to work with the Tao: Tao also refers to “the way of human life” as it “meshes” with the universal Tao in its second sense. This fundamental idea of Taoism has much to do with the “view of unity of man with Heaven and Earth, that is, with Nature.” Buddhists also believe that one must live in a certain harmony with nature and the universe to reach Nirvana, or, as it is in Taoism, be at one with the Tao.
Another vital concept of Taoism is that of the wu-wei which is to achieve action through minimal action or inaction. Action is friction and inaction is pure effectiveness in Taoism. This concept compares with Buddhist meditation in which one remains perfectly still and uses only one’s mind. In this state, one may reach enlightenment.
Also, in the Tao Te Ching (13) an idea close to the Buddhist idea of reincarnation is illustrated:
Attain to the goal of absolute emptiness,
…He who knows eternity is called enlightened.
He who does not know eternity is running blindly into miseries…”
Buddhist reincarnation is the concept that one must go through many cycles of birth, living, and death. After many such cycles, if a person releases their attachment to desire and the self, he can attain Nirvana. In the third and fourth lines of the Taoist passage above, the basic idea of Buddhist reincarnation is explained.
In the idea of reincarnation lies the belief that a person will be born and reborn until he or she reaches Nirvana. Taoists also believe in that basic idea: “The Tao surrounds everyone and therefore everyone must listen to find enlightenment.”
As you can see, although Taoism is more of a philosophy and less of a religion as Buddhism is, there are many similarities.