Actually, Luther's problem came from his reading of Paul's Epistle to the Romans, in which he read "the just shall live by faith." This occurred after Luther had experienced enormous personal torment feeling that nothing that he could do would free him from sin. His ultimate conclusion was that faith alone was necessary for salvation; good works did not figure into the equation. True, as indicated by the earlier post, indulgences were being sold for repairs to St. Peter's Basilica, and Luther engaged in a lively debate with Johann Tetzel, who was pushing the sale. Most scholars agree that Tetzel won the debate, however. To Luther, good works were worthless in seeking salvation; indulgences were a good work, therefore they were worthless, even though they might be for a good cause.
Since salvation came from faith alone, there was no need for anyone to intercede on behalf of a penitant, neither priest nor pope. This obviated the idea that the Pope was the emissary of Christ on earth. Luther rather argued for the "priesthood of all believers." So to Luther, indulgences were worthless, and should not be promoted by the church.
The sale of indulgences to fund the rebuilding of St. Peter's Basilica in Rome was the immediate cause of Luther's posting of the 95 Theses that set off the Protestant Reformation. The sale itself was a major issue for Luther, but so were some of the things that this sale implied about theology.
Luther did not like the idea of selling indulgences for a number of reasons:
- It implied that the Pope had more power than Luther thought he should. If God thinks it is right to punish someone, how can the Pope override that decision?
- It implied the existence of Purgatory, where people go to suffer for their sins after death. This is supposed to purify them over time and allow them to get to Heaven. Luther had his doubts about the existence of this state.
- It implied, most importantly, that forgiveness for sins could be obtained simply by "works." It implied that a person could do something to merit forgiveness. Luther thought that true forgiveness could only come if the sincerely repented of the sins within their own heart and mind.
Overall, then, you can say that the sale of indulgences was one of the biggest issues Luther had. But it might be more accurate to say that the assumptions behind the sale were what really made Luther uncomfortable.