End Charitable Deductions

Financial Justice Ideas and Issues National Politics

Ntax-cutew Orleans Thinking about it, there’s really not much of a consistent, coherent, politically progressive position that can defend the continued existence of the charitable tax deduction for donors, both citizen and rich.  I think we should all do our part to support the government and, hey, even take a shot at the debt, and argue for an end of all charitable deductions.  Period!

First, it’s a lot of money.  According to an article in the Times this week quoting the Congressional Joint Committee on Taxation, the U.S. government loses “roughly $237 billon to the deduction” over an estimated four year period from 2009-2013.  With 14 trillion in debt I admit that this is a small drop in the big bucket, but having run non-profits all my life, I’m glad to do my part.

Second, the rich don’t need it and haven’t earned it.  The advantage of the tax giveaways squandered on the rich have even left people like Warren Buffet, Bill Gates the Elder, and others publicly admitting that they pay too little taxes.  Given the tax breaks already offered, the last thing we need to do is giveaway more tax advantages.  Today’s paper makes the case loudly.  Bill Gates the Younger was all over the front page because he’s dropped millions into his current priorities around educational reform focused on teacher evaluation (not training from what it seems) and union seniority rule bashing, so hard strapped school districts that have to lay off teachers can also contend with Gates the Younger whose first time in a public school may have been long after he made his first billion.  That was page one.  Page four returned to Warren Buffet who was $50 million “lighter” as he happily said having helped fund a nuclear warehouse with various governments.  All of which in both cases is fine, but in both cases they could have afforded such philanthropy even without the deductions, and in my view government arguably could have done the “right” things with their tax dollars, and they could have organized for the change like the rest of us biscuit cookers by convincing other citizens to join with us and make change, rather than using their change to force governments to bite at their bit.

Third, poorer people give more of their income away than the richer folks and largely without the benefit of any deductions on the short form, so why bother since the giveaway hasn’t “worked” anyway.   In short people who want to give will give.  People, who only give for the deduction, should let the government “give” where there is at least the hope and promise of accountability for the gift, which doesn’t exist for the rich at all.  The perversion of money in politics is an excellent example of how willing the rich are to spend for what they believe in, regardless of the tax consequences.  They already have an outsized voice, why offer a deduction to give them a larger sounding board than other citizens?  No reason that I can imagine.

Fourth, democratic government at its worst in the United States is better at setting priorities for all the people than rich individuals at their best.  There simply is no conceivable argument that I can imagine to favor elitism of the few with the wisdom and benefits of the many.

Finally for progressives, let’s get self-interested and come to grips with the fact that “they” get way, way more benefits than we do.  Their foundations are more numerous and they are just way more conservative.  Progressive foundations and donors can still be counted virtually on your hands and feet, while theirs are frankly legion.   If deductions mean anything, then by getting rid of deductions we might be striking a huge blow for the progressive cause just by dumping the deduction.

Sounds like a good name of the campaign:  Dump the Deduction.

Whatever?  My vote:  get rid of the charitable deductions.  Period.