Maggie's Farm

The saying, “charity begins at home”, gets at many issues at the heart of most learned discussions of the charitable deduction from income tax, but also raises a core issue that is too often missed. The income tax is not about charity and should not be given equivalency to charity, and even if many government programs are charitable individual choices to either give charity or not is preferable in most cases and should not be discouraged or dictated by government.

Charity should not begin, or end, wherever government says so. Government should begin or end wherever citizens say so. There's room between but to place government above private choice and enterprise is to misplace priorities and public good and benefits.

The US Senate Finance Committee just held hearings about the charitable deduction that mirrored the arguments that have been raised since the inception of the deduction with the federal income tax during World War I. The questions revolve, and revolve and revolve, around should there be a deduction or other scheme, how much should be allowed, by whom, to which type of organization. Reading a brief history of hearings on the deduction, there is an underlying premise that all of income is subject to government priorities.

I won’t argue for the most selfish interpretation of “charity begins at home”, that all of one’s means should be kept within one’s walls. The Jewish conception of what in English is called charity, tzedakah, makes it a high personal obligation, and unlike the frequently cited 10% the Jewish Testament calls for more as can be afforded. Christians and others of good faith or morality think similarly and give similarly.

On the other hand (as any good Talmudic discussion goes) “charity begins at home” also raises that it is voluntary and one should not abuse one’s personal responsibilities. In other words, the fruits of one’s inheritance or labor are primarily one’s own to decide their use. On the other hand, again, in the social contract we enter into for the personal benefits of being part of a larger order, government, we accept that we are taxed for the general good. In a democracy, cumulatively we choose how much that tax may be and on what. Of course, that is not perfect as there are differing ideas of how much and on what. But, public engagement and elections are available to weigh in.

Throughout the years of government debates on the charitable deduction the incentive has been on raising government revenues, with differing theories of who should pay how much and the relative efficiencies of the schemes and their effects on differing types of recipients being the details.

No one denies, all should abhor, that there are many recipient organizations that abuse the laws and donors’ good intentions to profit insiders and not the public good. That calls for increased enforcement through public exposure, investigations and criminal prosecution. But, on the other hand, that still leaves many recipient organizations allowed by the tax code to commit other abuses of common understandings of charity, such as being mostly political or their proceeds benefiting other than the needy poor. After much outrage and years of mulling this, I still have to come down on the side of the argument that says our money is ours and that there is inadequate justification for giving it instead to government that too often does the same as non-charity charities, not to mention profiting politicians, revolving-door or job-protecting bureaucrats, and government cronies.

Washington, D.C. is the country’s wealthiest area, richer than Silicon Valley. Senate Majority Leader Harry Reid says “government jobs must take priority over private-sector jobs.” There are Republican and Democrat feeders at the government trough and who are profiting from crony capitalism. There is less to show from all their taxpayer expense than they would want us to believe. There is more to show in general public good from entrepreneurs, productive businesses, steering progress through private choices of what is needed or desirable.

Read "Nathan Glazer’s Warning: Social policy often does more harm than good"