Tax the rich less and they will give more
The wealthy contribute more income to non-profits than any other people group in our economy. Let’s give them more tax breaks so the non-profits we love will thrive even more.
Recently, I had a conversation with a co-worker about how a community in our area has more charities than any other city in America. We figured that it’s probably because it’s full of many wealthy and active retired people.
According to a CNBC article, millionaires give an average of 9% of their income to charity. The national average for household giving to charity is only 2.2% (National Center for Charitable Statistics — Facts and figures). I believe this is because wealthy people tend to give out of abundance whereas most of us give out of scarcity.
I think we can all agree that millionaires have a higher income than the national average. But why should they be in a higher tax bracket?
The NPR Planet Money program often features economists who say that it makes no economic sense to tax higher income earners disproportionately on their income. They already earn more, so they pay more at any percentage.
For example, if someone earns $50,000 and was taxed on income at 20% the government would get $10,000 in taxes. If another person earns $500,0000 and was taxed at the same rate of 20% they would be paying 10 times that amount in taxes. Ten times the earnings, 10 times the taxes.
This is fair.
It’s also encouraging to people who desire to pick themselves up and become more valuable to the economy. I’ve heard someone say before that they don’t want to earn a lot of money because past a certain point, all the extra money goes to taxes anyway.
Everyone deserves to have more of their earned money to give. They deserve a choice of where that money goes. The ones who earn the money in the first place are more likely to research charities than politicians. Politicians don’t steward over tax money as well as wealthy people steward over their own blood, sweat, and tears earnings.
Not all of us can be billionaires like Bill Gates and Warren Buffet, but all of us could give more. That is if we had more money to give as we are eagerly aiming to achieve greater earning potential.