Capitalism, Chairty and Leadership

Comment

Comment by Bob Schaffer on May 9, 2009 at 1:30pm

...not my viewpoint, but an assessment of natural habits. Income level has nothing to do with one's preference for charity. Most people, no matter how much they make, would prefer voluntary charity to confiscation by government tax collectors. Who in their right mind (other than a few Alaskans), for example, would want their family income forcibly spent on the infamous bridge to nowhere, when, let's say, their local food bank needs money to keep its doors open? The individual choices of millions of free people is far more rational than a political back-room deal cut by an Alaskan senator in Washington, DC.

The key theme of your last question is "given the choice..." Under any circumstances, personal choices on how to appropriate one's privately earned money are better than redistribution of wealth through the legal plunder by government agents. This, of course, involves no choice at all, only the harvesting of wealth produced by the sweat of your labor. Liberty is always better than bondage.

More to the point on economic choices: Government bureaucracy skims a far higher portion of taxes from their intended objective. Government's overhead is the highest there is. For example, only a fraction of federal education money actually makes it to a classroom. The bulk is siphoned off to pay for the IRS that assesses and collects the tax, the Congress that sets the tax rates and appropriates the taxes, the Dept of Education staff that calculates the distribution systems, distributes, accounts for, and reports on the expenditures, the State departments of education that receive the taxes and redistributes to the local school districts, the district administration that collects its share and redistributes to the schools (just in Colorado there's 178 school districts), the principals and school front offices that collect and budget the taxes then compile reports on how the tax was spent by the school, finally by the teacher who delivers some product (books, computers, etc.) or services then compiles reports to the principal on how the taxes were spent. The fraction that's left goes to the students. My choice would be to donate my money directly to the school or the teacher, thus achieving better efficiency.

Of course, private charities have overhead, too. However, the industry standard is usually around 10% of total program costs. Any rational citizen would prefer to fund that than the enormous cost of government overhead.

Finally, every charity is competing for donations. The competition demands efficiency for this very reason. Donors move on if they're not satisfied with the impact of their donations. Try that with government.

Less than 1% of Americans support Alaska's bridge to nowhere. Yet, 100% of us are forking over our hard-earned income to pay for it -- and why? Because former US Sen. Ted Stevens cut a back-room deal to get his pet project funded (prior to his indictment, by the way).

Again, the choices of millions of Americans are always more efficient and rational than the preferences of the Ted Stevens of the world (and his buddies who voted for this baloney. Oh, and keep in mind this is just one of 8,000 examples of "pork" spending -- that year).

Whether you enjoy extraordinary wealth or you're deep in debt, liberty is always better than bondage. That's my opinion.

Finally, I'm chairman of a civic leadership training program called Leadership Program of the Rockies. Check it out at www.leadershipprogram.org We take 65 new students every year through a nine-month program -- one Friday per month plus a weekend retreat. The program focuses on lessons and strategies just like this one predicated on America's founding principles, free-markets and liberty-oriented solutions to contemporary problems. And it's a non-profit charity! You should apply, based upon your questions, I have no doubt you'd love it.

Thanks again for the dialogue.

Bob

Comment by Eric Canaday on May 9, 2009 at 10:00am

I reviewed the article and the information on your website and I think I understand your perspective. Correct me if I am wrong, but...

given the choice between contributing to a community based charity or paying higher taxes to the government, most people who earn $250K or more would choose the charity.

Is that a fair assessment of your viewpoint?

Comment by Bob Schaffer on May 8, 2009 at 9:27pm

Well stated. Thank you. The Obama proposal has only been stated publicly recently. It is promised to be folded in to broader comprehensive tax-hike legislation later. Here's a comment from a local charity on the impact which includes a link to a Denver Post story on same. You're right, I did read opinion into your initial reply and stand corrected. Again, thank you. Bob

Comment by Eric Canaday on May 8, 2009 at 9:09pm

"Thanks for your thoughtful inquiry. Your conclusion is regrettably wrong, unless facts don't matter, which I'll concede they don't for some."

Whoah! My conclusion ended with a question so I was not drawing any lines in the sand my friend ;0)

"All charity is motivated by some altruistic purpose. If it's forced, it's bydefinition not charity."

I agree with this statement. However, I know from personal experience that many people give out of fear, guilt, personal benefit, and sometimes coercion. Non-profits need the money, and government incentives to give help to meet this need. So the ends justify the means.

I am generalizing but most of the money that is donated to charitable organizations is used to cover employee salaries and property maintenance. I view tax deductions for charitable contributions as an incentive to do something we should be doing anyway.

If I had less debt I would give more. I would like to see something done about the interest rates and unreasonable late fees that people in the middle class are paying right now.

All that said, I want to make it clear that I am just thinking out loud. I am not saying I am right and you are wrong. I love social media because it gives me a chance to talk to people who know a lot more than me. I am here to learn. If you send me a link to the proposal I will read through it and give you some feedback if you are interested.

Thanks for your service and for taking the time to challenge me to think about the world outside my window.

Comment by Bob Schaffer on May 8, 2009 at 7:48pm

"...charity is a theological virtue. If this is true, and people are giving from the heart, charitable organizations should not be significantly impacted by this change...right?"

Thanks for your thoughtful inquiry. Your conclusion is regrettably wrong, unless facts don't matter, which I'll concede they don't for some. All charity is motivated by some altruistic purpose. If it's forced, it's bydefinition not charity.

If you're like most people, if you had more income, you'd be inclined to give more away to charitable causes. The current proposal to confiscate more income from American families will definitely reduce charitable giving. Taxing charitable giving has historically resulted in less giving. The old maxim holds: If you want more of something, subsidize it. If you want less of something, tax it.

Ideally, the charitable deduction (along with other deductions) could be eliminated and the rate simultaneously lowered in order to offset the deductions thus leaving an improved amount of discretionary income in the pockets of the people. This would simplify the tax code -- getting us closer to a fairer, flatter tax policy, increase charitable giving and strengthen the economy. The present proposal, though, actually contemplates increasing tax rates on the most charitable Americans. Punishing them further by eliminating the deduction will certainly replace charity with less-efficient bureaucracy, which will hurt charitable recipients in addition to charitable givers. Furthermore, by shifting more wealth from the private sector to the government, economic recovery will be further delayed. Of course, this is what some want to happen. You may be in that category -- a valid opinion, just one with which I respectfully would disagree. My tendency is toward freedom and a centrist tax policy that encourages charitable giving and less bureaucracy. However, I know there are many who agree with you that more bureaucracy is better.

Again, thanks for sharing your considered viewpoint. Bob

Comment by Eric Canaday on May 8, 2009 at 6:21am

"President Barack Obama recently defended a proposal to limit tax deductions for charitable giving."

Placing limits on tax deductions will only impact charitable contributions if the companies/individuals who donate only do it to get the deduction. In this article you stated that charity is a theological virtue. If this is true, and people are giving from the heart, charitable organizations should not be significantly impacted by this change...right?