Left In Lowell

Why Charities and Not Taxes?

by Lynne at 10:44 pm.

Today is Christmas day, and I’m guessing if you looked at American rates of charitable giving throughout the year, you’d see us as most generous in the month of December.

So puzzle me this: why is it we have warm, fuzzy feelings for giving donations to charity but not when our tax dollars are used to help the less fortunate?

With the former, people believe they have done their part in alleviating poverty or helping feed a child and they are lauded. With the latter, I hear the same tired litany about why should their hard-earned money be taken from them and given to some lazy single mother who can’t pull herself up by her own bootstraps?

I spent part of my (secular) celebration of Christmas with my loving but conservative family. With the exception of one uncle, my generally working-class relatives look at taxes in the same way that you might regard a pile of vomit on the floor: something to be avoided at all costs; or if approached, with one’s nose pinched. And one would prefer it to be removed altogether. But ask them how they feel about giving to Catholic Charities or the Salvation Army or any other charity, and they would sing a different tune.

Some may claim that the difference between taxes and charity is that you volunteer to give to charity. Taxes are mandatory, and as such, a burden, with no option not to pay them. This would be a good argument, except for this: depending on charities to deliver services to the poor is only punishing the good guy. Good behavior should be rewarded, not penalized. The selfish guy can get away with benefiting from the positive effects of helping the less fortunate without having donated to its upkeep. What positive effects, you ask? Well, money spent on the poor generally causes ever-increasing upward mobility, so there are more people to buy Mr. Scrooge’s widgets and he makes more money; a lowered rate of crimes of desperation keep his person and his estate safe; and in a million other ways, everyone’s lives are improved.

If we decide that investing in our society is a worthy goal (and you decide that every time you give to a charity) then we must make that investment across the spectrum of people who profit. Only that will yield the sort of stable civilization that fosters a strong economy. It’s no accident that the stock market does better under Democratic presidents - sure, they tax a little more and spend a little more and regulate a little more: but remember, it was a less regulated market in 1929 that crashed. And everyone who benefits - meaning everyone! - ought to participate in donating especially if they are very fortunate. And the more fortunate, the more they should be expected to contribute; because the rich gain the most from a stable, safe economy.

And the next argument you’ll hear against taxes is the waste. $100,000 hammers and all that anecdotal evidence. Well, a good for-instance in the other direction is Medicare (with the exception of the draconian new drug benefit); it is the tightest-run health insurance ship in America right now, with its administrative overhead taking up far less of its expenditure than private insurance. In fact, in dollars spent per person, our private system is the least efficient in the developed world, despite the lies told by conservatives about the universal health care systems in other countries.

Government, just like private enterprise or non-profit charities, is only as efficient as it is administered to be.

I’m sure if we all think about it, we can detect in our lives the imprint of being on the receiving end of taxation. I was able to go to college because the government redistributed someone else’s income my way. With that B.A. under my belt (never mind the economic uselessness of writing poetry) I could improve my lot in life. And every year, the government makes sure thousand of kids get fed and sheltered, families are kept out of the cold despite a low income (an income that’s stagnated over the last few years) and seniors get a check every month so they can pay their heating bill. How is this different from a charity “hand-out”?

What we need is an attitude shift. Obviously, you do want to know what’s being done with your dollars (and this attitude, by the way, should translate to responsible buying in retail, market investments, and even in choosing your charities). But we need to acknowledge that when we send our tax money to Washington or Beacon Hill, it’s not going to waste. In large part, the government is a charity we all participate in to secure the sort of society we want - for all of us, from the most destitute family, to the very richest Wall Street mogul.

[Crossposted at BOPnews.com]

[Filed under Liberal Philosophy] [link]

19 Responses to “Why Charities and Not Taxes?”

waittilnextyr Says:
December 26th, 2005 at 9:55 am
Good discussion, Lynne, but I would question one segment.

“This would be a good argument, except for this: depending on charities to deliver services to the poor is only punishing the good guy. Good behavior should be rewarded, not penalized.”

Now, why would you consider the act of charity “punishing” the giver? Maybe because it is almost as impersonal as “giving” through taxes? If so, it may be that most charities exist for the organization, not the recipient. Take Bill Frist’s charity, for example. At least 20% of the money gets disbursed to his political associates in the form of consultant fees. That is why I much prefer charities at the local level, where you have better insight into where the money goes.

But, back to taxes and how that money is spent. I think it is unconscionable how the Bush administration has executed a wealth transfer, both from lower/middle income to rich, and from future generations to the favored few of today. In tax rates alone, the middle class rates changed from 35.65% (28% income, 7.65% SS/Medicare) to 32.65%, whereas the upper class rates changed from 41.05% (39.6% income and 1.45% Medicare - no SS) to 36.45%. So, although each reduction may have been advertised as 10%, the middle income rate reduction was 8.4%, whereas the top class rate reduction was 11.2%. Changing these to dollar numbers greatly separate the differences. And, to make things worse, the capital gains and divident reduction, which overwhelmingly apply to the rich, went from 20% to 15%, a 25% reduction on income tax rate for money that was not acquired by hard work.

And as for spending, you can bet for every dollar taken from programs benifitting the masses, two dollars have been doled out to supporters of the administration. Wealth transfer and deficits are the hallmarks of the Bush administration from a financial point of view!
Lynne Says:
December 26th, 2005 at 11:03 am
It’s punishing the giver because the non-giver gets to keep his cash, while the generous person is doing the right thing and is poorer for it. But everyone benefits when the less fortunate are helped, the rich benefiting unequally more.

And thanks for the numbers - it’s disgusting.
Mike Says:
December 26th, 2005 at 3:50 pm
I have a question, not related to this posting…as I often do. But sometime things happen in Lowell and I think this is a good place to discuss it.

As a relatively new resident in Lowell, I was amazed that Our Father is still recited before City Council meetings and a Nativity scene is put up at the steps of City Hall.

Has this ever been challanged? How do all of you feel about it? Should it be an issue?
waittilnextyr Says:
December 26th, 2005 at 4:48 pm
With respect to Mike’s questions, it also surprises me. I have to conclude it has not been challenged in Lowell.
Ken Says:
December 26th, 2005 at 5:43 pm
Well, I’d argue that government handouts tend to drastically decrease upward mobility. They increase complacency and dependency and discourage personal responsibility. When you have government food stamps and welfare and section 8 vouchers, why bother working? Any job someone on those programs can get is not going to get them more personal wealth than they get from the government, so why bother working? And since they’re not working, they’re sitting at home doing nothing. From there, they join gangs and commit crimes.

Just look at France as a perfect example. Their ridiculous welfare programs have perpetuated a huge underclass of poor people, restricted GDP growth, and caused riots and crime.

Charities are generally much better at sorting out the hard-working lower class families who need help from the lazy deadbeats who want handouts. Plus, they’re voluntary rather than mandatory, a big distinction.

The reason that Medicare is run efficiently is because of the nature of the private, government-structured and -regulated system. The structure of the private system ensures its inefficiency. You’re right that government is only as efficient as it’s administered to be. That’s the difference between government and business. Businesses have to compete with each other, and because of that competition, the inefficient and incompetent are weeded out. Only the most professional and competent survive. It’s much like natural selection, Darwinism. Government, however, is insulated from market forces, so there is much less incentive to be efficient or provide the best quality services. Democracy is the closest we can come to introducing market forces into government (politicians have an incentive to appoint competent adminstrators because if they don’t they’ll be voted out of office - this is why American government is more efficient than, say, Chinese government), but it’s never going to work as well or efficiently as private enterprise.
waittilnextyr Says:
December 26th, 2005 at 7:10 pm
Although I cannot now cite references for the following claim, I am quite sure that it is true, and portends an economic downturn — Under the current administration, there is a divergence of wealth in the United States.

Such a divergence of wealth has occured previously in this country, and was likely a contributiong factor to the worst period in our economic history.
http://www.geocities.com/CapitolHill/Senate/6854/greatdep.html

What actions should government take to reverse this trend? Tax policy would seem to be the only leverage it has, yet it is using that policy to further separate the rich from the poor. What would each of you suggest to change this direction?
Lynne Says:
December 27th, 2005 at 9:12 am
OK Ken, let’s let everyone who’s poor just die from starvation. There are the workhouses and orphanages, let the poor go there, right? Not to mention, not in one place did I actually say anything about SPECIFIC programs, except maybe about college loans. Boy, did YOU miss the whole point of the piece.

Look, income stratification is a NATURAL occurrence in any economy. Once you have money, it’s easy to make more money. If you have no money, it is hard, hard as hell and getting harder to get yourself up into the next level. If the government did not regulate and tax and spend, we would be Brazil. We would be England at the turn of the century, with vast amounts of poor, very few middle class, and a set of really rich upper class types.

Income redistribution comes in the form of schools for every community. It comes in the form of Social Security for our seniors. It comes in the form of subsidized transportation so that everyone can afford to get around. It comes in the form of paved roads. It comes in the form of police and fire departments. If you want to sit there and whine about welfare, fine. Personally, you haven’t said anything that isn’t a Republican talking point - if you ask me, I’d rather give out food stamps and know that a kid isn’t starving in the street than let him starve as an incentive to him, and if you think there’s no motivation to get you out of that life even if you’re on food stamps you’re fracking crazy, but hey, I’m just softhearted that way maybe.
Lynne Says:
December 27th, 2005 at 9:20 am
Oh, and yeah, right, businesses are so much more efficient. LOL. Look at the overhead for insurance companies. Look at the overhead that pharma companies have. Much more efficient. I spent a while in the private sector watching the big companies I worked for waste soooo much money it wasn’t even to be believed. Once a company gets big, it’s just as unwieldy as anything else - it offsets that of course with economies of scale - it can buy its widgets at a lower cost-per-unit because of the size of the purchase.

Then, there’s virtual monopolies, of which we have many, who don’t have to be efficient at all.

waittilnextyear: A regulated market for one. We’ve been deregulating over the last 20+ years, which led, for instance, to the Enron and Worldcom scandals.

As to the Our Father at the meetings, that’s been bugging the crap outta me since I moved here. (I’ve ranted on it on plenty of occasions.) And yes I think it should be challenged. Not only is it mixing religion and state, it’s promoting a specific religion. I was the only one not standing to recite the Our Father at the last meeting I went to. I refuse to do it, but of course it makes me terribly uncomfortable to be the only one. The element of peer pressure in group settings like that makes it an issue. It ought to be challenged and abolished. I don’t mind the moment of silence/darkened chamber for the departed (as it is very respectful and non-specific), but the Our Father has got to go.
Mike Says:
December 27th, 2005 at 12:53 pm
Lynne:

Who should be the one to challenge it?

I assume you need to get a city councilor to stand up against it. Who in the world would be willing to do that? Who wants to be known in this community as the one that fought the Our Father?

Don’t think any of them have the guts to do it.
Narey Says:
December 27th, 2005 at 3:27 pm
Mike:

I recall that a few years ago the City Council did discuss the reciting “The Lord’s Prayer.” I forget why the issue was raised but I do remember vividly that the Council at the time strongly reaffirmed this tradition.

It may be illegal but I have no real objections to a government body opening up its sessions with some kind of public meditation. However what is happening in the Council chambers is unfair and unjust; we publicly recite a Christian prayer when we have so many different religious affiliations in Lowell.

Would it not be better if we had someone from the Buddhist Temple, or the Church of the Latter Day Saints, the Jewish Synagogues, the Hindu Temples, the Christ Scientist Church, Jehovah’s Witnesses or any of the dozens of other Christian and non-Christian religious groups that make their home in Lowell provide non-sectarian, non-denominational guidance.

From a strategic point of view, I do not think this is an issue I want to raise at this time. There are so many other problems and concerns I have about the direction of this City that require attention, I would not want this to be a distraction. I just can imagine what kind of reactionaries this would galvanize.

But Mike, good observation on your part.
Ken Says:
December 27th, 2005 at 3:56 pm
OK Ken, let’s let everyone who’s poor just die from starvation. There are the workhouses and orphanages, let the poor go there, right? Not to mention, not in one place did I actually say anything about SPECIFIC programs, except maybe about college loans. Boy, did YOU miss the whole point of the piece.

Nobody who is poor will die from starvation. There are all kinds of jobs available for them. Anyone who wants a job can get one - maybe not an extremely high-paying job, but enough to “put food on their family”, as Bush would say, nonetheless. Your post was about taxation vs. charities, so I figured that the programs for the poor paid for by taxation were fair game. Anyway, I’m very much in favor of student loans. To be clear here, not everyone who’s against large government programs to help the poor is against them because they’re against the poor. Personally, I’m against them because I think that they hurt the poor much more than they help them by creating a permanent, government-dependent underclass. I’m very much in favor of the same ends (helping the poor) that you want, I’m just disagreeing on the best means to get there.

Look, income stratification is a NATURAL occurrence in any economy. Once you have money, it’s easy to make more money. If you have no money, it is hard, hard as hell and getting harder to get yourself up into the next level. If the government did not regulate and tax and spend, we would be Brazil. We would be England at the turn of the century, with vast amounts of poor, very few middle class, and a set of really rich upper class types.

I’m not against government taxation and regulation. I’m against shortsighted and bad government taxation, spending, and regulation. Regulation is not inherently good or bad. Regulating that every corporation has to pay 90% of its profits in taxes would be an example of bad regulation. Regulating that corporations cannot lie to the public, or a regulation saying limiting carbon dioxide emissions would be a good regulation.

Income redistribution comes in the form of schools for every community. It comes in the form of Social Security for our seniors. It comes in the form of subsidized transportation so that everyone can afford to get around. It comes in the form of paved roads. It comes in the form of police and fire departments. If you want to sit there and whine about welfare, fine. Personally, you haven’t said anything that isn’t a Republican talking point - if you ask me, I’d rather give out food stamps and know that a kid isn’t starving in the street than let him starve as an incentive to him, and if you think there’s no motivation to get you out of that life even if you’re on food stamps you’re fracking crazy, but hey, I’m just softhearted that way maybe.

I would agree with you about the necessity of all of the programs you mentioned. And I realize I sound like a Republican, but that’s just because I only tend to post or comment on subjects where I have a disagreement with someone, rather than being inclusive and posting on other subjects - you, Blue Mass Group, and others do a good enough job of regularly posting about the news that I don’t feel the need to do so.

Oh, and yeah, right, businesses are so much more efficient. LOL. Look at the overhead for insurance companies. Look at the overhead that pharma companies have. Much more efficient. I spent a while in the private sector watching the big companies I worked for waste soooo much money it wasn’t even to be believed. Once a company gets big, it’s just as unwieldy as anything else - it offsets that of course with economies of scale - it can buy its widgets at a lower cost-per-unit because of the size of the purchase.

Ever worked in government? I’d agree with you that big businesses do not provide the same quality of service that small ones do - but compared to government, they’re unbelievably more efficient. My stepdad has a small import/export company, and he has to deal the competition from people like Fed-Ex and UPS. They’re cheaper, but they’re awful to deal with. But compared to government, they’re great to deal with. Seriously though, if you honestly think government is more efficient than big business then why don’t we just nationalize the means of production? Let’s switch over to socialism or communism. Seriously, if you really believe that, wouldn’t that be the natural thing to advocate for?

Then, there’s virtual monopolies, of which we have many, who don’t have to be efficient at all.

Examples?
Al Says:
December 28th, 2005 at 3:12 am
Big business is “incredibly more efficient”?

Enron?
WorldCom?
Global Crossing?
Adelphia Communications?
Renee Says:
December 28th, 2005 at 7:52 pm
As for the nativity scene, the space is open to any religion or speech at that spot. It is no different with the Southeast Asian Communities use public land to celebrate their holy days, as in the water festival.

As for charity over taxes, I like choosing where I put my dollar. It can get testy since everyone’s values are different. Charity must be encouraged, since one could be compliant to shut themselves from others thinking they did their part helping the poor when they live in a nice upperclass sub-division away from “the problem”.

At what point does a particular social value (food, clothing, shelter) become a right? No one is againt giving people these things, but at what costs to the freedom of other Americans?

I will save my comments regarding the pharmaceutical companies for later….
Ken Says:
December 28th, 2005 at 10:37 pm
Big business is “incredibly more efficient”?

Enron?
WorldCom?
Global Crossing?
Adelphia Communications?

That is like saying all humans are evil and using the examples of Timothy McVeigh, the unibomber, and the Boston Strangler to prove your point.
Phillipe Says:
December 28th, 2005 at 11:54 pm
Just some comments on people’s quotes that do not make sense -
“depending on charities to deliver services to the poor is only punishing the good guy. Good behavior should be rewarded, not penalized. The selfish guy can get away with benefiting from the positive effects of helping the less fortunate without having donated to its upkeep. ”

What’s the deal here? If you are fortunate enough to have money you want to donate, then please do. Some people actually like to give money because they feel blessed for being fortunate enough to try and help others. Because of that, if less fortunate people or even rich people benefit, great, that’s fine.

“As a relatively new resident in Lowell, I was amazed that Our Father is still recited before City Council meetings and a Nativity scene is put up at the steps of City Hall.”

I don’t understand why this bothers you so much. God is great, why are you so negative? You have the right to believe in what you want but others do to. If you try to argue ’seperation of church and state’ I’m sure you’ll also be one to argue that the right to carry arms shouldn’t count anymore.

“Wealth transfer and deficits are the hallmarks of the Bush administration from a financial point of view! ”
Why the such harsh view? Do you not see the economy expanding? Are you one of these people who believe that the economy is actually declining? If so you will always be negative your whole life. Massachusettes has lost population now for 2 years in a row. Why you ask? Perhaps people need to change their additude and be more positive. Sure the rich get richer, that’s what happens. If the less fortunate think like you do I really hope the rich make the decisions in the future.
waittilnextyr Says:
December 29th, 2005 at 11:45 am
Response to Phillipe’s comment.

“Why the such harsh view? Do you not see the economy expanding?”

The economy is expanding, but not at the rate of spending, especially for foreign made goods.

US Debt, from Treasury website:
12/27/2005 $8,100,276,189,509.07
09/30/2005 $7,932,709,661,723.50
09/30/2004 $7,379,052,696,330.32
09/30/2003 $6,783,231,062,743.62
09/30/2002 $6,228,235,965,597.16
09/28/2001 $5,807,463,412,200.06
09/29/2000 $5,674,178,209,886.86
09/30/1999 $5,656,270,901,615.43

US Trade Deficit, from Census Dept website:
2005 $598B through 10/31, projects to $718B
2004 $617B
2003 $495B
2002 $421B
2003 $363B

And those dollars that you have are not worth what they once were:

relative to Euro, depreciated 27.5% since 2000
relative to gold, depreciated 47% since 2000

So, not only has the Bush administration promoted wealth transfer, the economic growth that it touts is really a facade economy, with little behind it.

Change is overdue!
waittilnextyr Says:
December 29th, 2005 at 1:58 pm
Income inequality in the U.S.is high and rising, and under the Bush administration, it has grown at the fastest rate recorded in more than two decades. Data from public and private sources demonstrate that Bush has presided over a vast redistribution of wealth from working people to corporations and wealthy individuals:

· The number of high net worth individuals (HNWIs) — those with more than $1 million in financial-asset wealth — rose up 7.5 percent worldwide in 2003 but 14 percent in the United States, according to Merrill Lynch.

· While the number of ultra-wealthy jumped sharply in 2003, the number of people below the official poverty threshold rose to 35.9 million, or 1.3 million more than in 2002, according to Census Bureau data.

· The U.S.now has the highest inequality of any advanced nation as measured by the Gini index, a widely accepted indicator of inequality. In 2000, the Gini index for the U.S.stood at 40.8. It now stands at 43.5.

· As measured by the Gini index, inequality in the U.S.is closer to levels of inequality in the Philippines(46.1) and Kenya(44.5) than it is to Canada(31.5), the UK(36.0) or Japan(24.9), according to World Bank data.

· The official count of unemployed workers stands at eight million, but the total number of unemployed and underemployed has now reached nearly 14 million.

· In addition to the high rates of unemployment, another cause of increased inequality is the low-wage status of the small number of jobs created under the Bush administration. Of the 1.3 million jobs created from June 2003 to June 2004, 60 percent are in low-wage industries paying less than $13.30 an hour.

· Under Bush, median household income has declined by 3.4 percent since 2000 and by 6.0 percent among the lowest income families. As a larger share of household income goes to high income households, who tend to spend a lower share of their income, overall spending is reduced, demand falls and job creation dries up.

Although the World Bank, the International Monetary Fund and the United Nations consistently warn that increased income inequality fosters economic instability, the Bush administration has only exacerbated inequality in the U.S.
waittilnextyr Says:
December 29th, 2005 at 2:06 pm
A conservative view of the Bush Administration

“Under Bush II, social spending has exploded to levels LBJ might envy, foreign aid has been doubled, pork-at-every-meal has become the GOP diet of choice, surpluses have vanished, and the deficit is soaring back toward 5% of GDP. Bill Clinton is starting to look like Barry Goldwater.

Both Bushes abandoned the economic patriotism that had put America and Americans first—for free-trade globalism. Result: the most massive trade deficits in U.S. history, the gutting of our industrial base, the loss of millions of manufacturing jobs, and the largest wealth transfer of all time with technology, factories, high-tech and high-skilled jobs pouring out of America into Asia.

Working America and the middle class have been sacrificed on the high altar of the Republican Moloch of Free Trade. And how have our Chinese brothers reciprocated our magnanimity?

Both Bushes embraced the “open borders” immigration policy the Wall Street Journal has trumpeted for two decades. Result: We have 10-15 million illegal aliens in our country, among whom gangs like the murderous Mara Salvatrucha are proliferating. Native-born California taxpayers are fleeing the Golden State, as Third World tax consumers pour in. So great is the crisis on the Mexican border even the liberal Democratic governors of New Mexico and Arizona have declared states of emergency. Meanwhile 35,000 U.S. troops stand guard—on the border of South Korea.
—
In foreign policy, Bush I was an internationalist out to build a “New World Order” after the Cold War. However, post-9/11, Bush II converted to a neoconservatism that calls for unilateral American intervention in the Middle East and the Islamic world, to bring down dictators and establish democracy.

Thus, in March, 2003, Bush, in perhaps the greatest strategic blunder in U.S. history, invaded an Arab nation that had not attacked us, did not want war with us, and did not threaten us—to strip it of weapons we now know it did not have.

Result: Shia and Kurds have been liberated from Saddam, but Iran has a new ally in southern Iraq, Osama has a new base camp in the Sunni Triangle, the Arab and Islamic world have been radicalized against the United States, and copy-cat killers of Al Qaida have been targeting our remaining allies in Europe and the Middle East: Spain, Britain, Egypt and Jordan. And, lest we forget, 2055 Americans are dead and Walter Reed is filling up.”

—Pat Buchanan
Mike Says:
December 29th, 2005 at 5:19 pm
Philipe? Why does this bother me? I’m sure it bothers people of different faiths that ONE faiths prayer is used to start a public meeting. Doesn’t seem right to me. Is that faith the RIGHT faith? What are people supposed to think that have other beliefs?

December 25, 2005

Why Charities and Not Taxes?

19 Responses to “Why Charities and Not Taxes?”

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