Cheapness redefined

There are two types of cash donations to charity.

The most well-known is personal charity. This is when individuals give money out of their own pocket to help some charitable cause. There can be some personal benefits to this (donating to a kid's soccer team on which your child is a member, or donating to a church which helps pay the salary of the Reverend), or it can be donations to help the needy or cure cancer.

Sometimes people get receipts for these donations which can take a little bit of the sting out of the loss of cash as they are likely to be tax-deductible, but often people make these donations regardless of the tax advantages. But for those in the 30% tax bracket, a deductible donation costs the rest of society that lost revenue, which means taxes need to be raised on everyone a little bit more.

The second type is government-sponsored donations to help some worthy cause. For example, society can determine that needy people should be given food or medical services or housing and it provides public assistance for those purposes. Society pays 100% of these costs.

In most towns (including Acton) we have a food pantry to help people who are having trouble buying food. (If you'd like to make a donation, visit http://www.actoncommunitysupper.org/acton-food-pantry.htm). But this is clearly a supplemental or temporary service because we know the government has quite a large system in place for feeding people. State-provided EBT cards allow recipients to purchase food (and other items) without the embarrassment of using "food stamps."

In order to try to prevent public fraud, we force recipients to apply for such assistance and that process and delay could encourage some people to look for other alternatives like food banks. And there is probably the presumption that if you are visiting a food bank, you are assumed to be in need and I would expect the food bank to do little if any screening of their patrons.

The government spends a lot of public money on charity of various forms, and most people support a basic level of services for needy Americans. And there are people who believe that American society should be doing much more charitable giving than they are doing. Not everyone agrees. Some believe the level is fine where it is, and others may think we do too much and should cut back.

When we discuss public policy that has a charitable component, things can get tricky.

Perhaps that is why President Obama is so interested in helping the Central American illegal immigrants, for example. To him, this may be an example of good charitable work that the U.S. should be engaged in through public spending.

So let's use President Obama as an example. He believes that Americans should help these immigrants come to the U.S., settle here, and get public benefits. And let's assume this is for the best and noblest of intentions and has nothing whatsoever to do with politics. He just believes in helping people, and here are people who need help. The fact that they aren't U.S. citizens may be irrelevant to him.

Let's assume that the cost of helping a group of these people is $1 billion (it is much more, but we'll use that as an example.) That is far more money than President Obama personally has (yet) so he can't just write a check to cover this cost. Besides, even if he could, that would mean he couldn't support the other worthy causes he also believes in. He may have a list of 10 or 100 of them, who knows.

But President Obama is willing to contribute towards this need. He can "check a box," so to speak, that he would support this. And he believes this is appropriate for society to fund. So let's say that we have 100 million Americans who pay taxes and on average, each one will have to pay $10 in order to raise the $1 billion needed to fully fund this cause. President Obama is more than willing to check off that box to contribute his $10. And he knows his friends, neighbors, and supporters would also gladly check that box and pay the $10 each.

Unfortunately, charity by the government is completely different than charity by individuals. When the government spends money, it is forcing participation of everyone in society (at least the taxpayers). So those taxpayers who do not support spending $10 to pay for services for illegal immigrants (for example) are likewise forced to contribute. The cost of any particular program "per taxpayer" is much less expensive than if the same cause were funded privately. This is probably true even if the government bureaucracy is less efficient and it costs the government more than it would a private foundation.

President Obama could privately raise the money he wants to support this spending. He could contact all of his friends and relatives, create a Facebook page, and send out press releases urging people to donate to this cause. A few fundraisers here, a few speeches there, and he could probably raise a significant amount of money. And there would be many political allies who could help too.

Let's say President Obama embarks to do this privately and the effort is successful. After all, there are lots of private charities that do raise significant money through voluntary donations (think Jimmy Fund.)

There is a lot of work involved in this, but the bottom line is that every donor who does participate would have to donate a lot more individually (on average) in order to raise the same amount needed. So depending on the number of donors and the money raised, President Obama might have to donate $100 or $1,000 or even $10,000 or perhaps even $100,000 in order to help his newly created organization raise $1 billion. Even if he donated zero, the effort involved would certainly exceed the $10 extra he'd pay in federal taxes.

Now President Obama has a lot of charities to support, and even though he feels strongly about this one, he certainly doesn't want and can't afford to make such a large cash donation to one cause. He is much more comfortable having the government do it, where he can donate $10 and achieve the same ultimate goal, which is $1 billion raised.

As a general rule, Republicans prefer private charity than public charity. They believe that if you wish to help someone or some cause, that you should make a generous donation. But forcing people to donate to things that they personally don't support, or aren't that interested in, or perhaps are actively against, is inherently not fair. It is certainly less expensive per person for the government to fund it, but paying taxes isn't voluntary. Charitable work at its best should be voluntary.

Now some readers will say "ah ha!" at this argument. They will claim that they are forced into all kinds of spending with which they disagree, so disagreement is not a reason not to pay "your fair share." But this counterargument is flawed. Government has no inherent responsibility to fund charity. It isn't the core business of government.

If you took a poll and asked people if they supported giving food to poor people in America who otherwise would starve, I'd bet 95% of the respondents would say yes. So for the sake of argument, everyone in America supports basic charitable giving by the government. The only exception is that some people believe government is so inept as an institution and running such programs involve so much fraud, waste, and mismanagement that there may be better and less expensive ways to accomplish the same goal. But the underlying support is definitely there.

It's not that Republicans are "cheap." In fact, after thinking about this, I hope you can see how in the example above it is President Obama who is being "cheap." He is personally interested in a particular cause, but he doesn't want to do the hard work to create a private foundation and ultimately he ends up paying $10 to support it through public giving rather than paying 10x, 100x, or 1,000x to achieve the same goal.

Now maybe Democrats have more empathy towards the poor, or maybe they are better able to transfer that empathy to people they don't know, even if they are in foreign lands. Perhaps Republicans prefer to help individuals or groups that they are closer to and don't worry so much about areas outside their immediate town or state. Even if all that is true, what gives Democrats the right to force charitable giving on others who disagree?

What bothers most Republicans about this is that they aren't free to choose which programs they personally want to donate to. Some other group ("society") is making those decisions. Somehow, that doesn't really feel like charity when it is forced. And since government has no duty to charity, the decision to spend public monies on charity should have widespread support, not 51%.

Our tax forms could have a list of voluntary contributions which would raise your personal tax bill. Having the government collect and process this money would probably be a great program and could raise millions of dollars for worthwhile causes. Then anybody who checked off "help illegal aliens" could have an extra $10 added to their tax bill. No one could object to such a system nor the spending of those funds.

But the fact remains that as a rule, Democrats would rather force everyone to pay a little rather than have themselves pay a lot. To me, that is one valid definition of cheapness.

This has a parallel in local Acton tax policy, which we shall cover in Part 2.

SEE PART TWO HERE: http://www.actonforum.com/blogs/allenn/acton-tax-policy-based-cheapness-...

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