You are the economist, and I am merely a brain surgeon, but I am as you might imagine a serious and substantial tax payer. What I would like to suggest is the reverse of your premise: that more charitable giving, not less, and charitable giving that is 100% tax deductible, might be a productive path for solving many of society’s ills. I concur that much of present day charitable giving is misdirected (our financially sated institutions of Yale and Stanford being cases in point), but I also submit that much of government’s efforts to address poverty are misdirected, and often frankly harmful to its recipients. I envision a world where a portion of taxes goes not to the government (or big universities/churches/hospitals) but directly to a wide array of not-for-profits that have greater inherent flexibility and imagination to address many social ills, and especially poverty. Not-for-profits would need to compete for tax payer directed funds directly, and would not be required to go through government granting efforts as is the current practice. This process would allow considerable social experimentation. While it can be argued that some social concerns might get ignored this way, I suggest that the mere fact that something is ignored will build urgency and a charitable constituency. Ultimately, nothing prevents government from stepping in if a need goes totally unmet. Meanwhile, I as a taxpayer, who would acquire some control over how the fruits of my hard labor is spent, and thereby far less resentful of the current system. In addition beneficiaries of charity would understand that they in fact owe gratitude to those who pay the taxes. Let government do what it does best, and enable NGOs to better excel in their mission?
