Privatize Government Charity

American’s routinely give hundreds of billions in charitable donations annually, giving over $316 Billion in 2012. Every penny of this private charitable giving is voluntary.

Federal and State government gives away more than $1 Trillion dollars in charitable donations annually. For 2014 this combined Federal and State charity is budgeted in excess of $1.36 Trillion, or more than 4 times voluntary charitable giving. Every penny of this government charitable giving is compelled by law, and allocated and managed by government.

This $1.36 Trillion in government compelled charity includes $507 Billion in Medicaid and other direct health care assistance, $120 Billion in unemployment payments, $102 Billion in housing subsidies, $105 Billion in food stamps, and $175 Billion in “income security” payments (earned income tax credit, etc.). Note that these charitable programs specifically exclude Social Security and Medicare payments.

CBS NEWS recently reported that there are more American’s receiving at least one form of government charity than there are working Americans. Over 108,000,000 Americans were direct recipients of government charity in 2011 while there were 101,000,000 American’s with full time jobs. In approximate terms roughly 101,000,000 full time working Americans are each compelled to pay an average of over $13,000 annually to subsidize this charity (part of which is included in the annual government deficit each working American has effectively borrowed and will have to pay back).

A morality problem arises as those with a financial vested interest in government charity become a majority who vote for politicians promising to continue and to enlarge such payments at the expense of independent working Americans.

A solution to this problem lies in privatizing government charity.

Progressives justify their re-distributional policy priorities using words such as “equality,” “social justice,” and “helping the most needy.” They insist on moral grounds that government should be in the business of charity even though, as pointed out above, there is a point fast approaching where compelling charity and imposing dependency is itself immoral.

So, let’s keep the compassion and take the power away from politicians by empowering every taxpayer to contribute a percentage of their tax bill directly to charities of their choice as a dollar for dollar credit. For example, in 2014 the Federal government will donate $800 Billion in welfare charity, constituting 21% of total Federal spending. If my tax bill before charitable donations is $10,000 I could pay $7,900 to the IRS and donate $2,100 (21% of my tax bill) to charities in lieu of paying that amount of tax. To address concerns about those with the highest tax bills setting charitable priorities a clearing house could be used to allocate charitable dollars based on percentages of allocation choices made by taxpayers.

This approach would put the power of compassion in the hands of taxpayers and remove politics from welfare. Individual taxpayers would decide which charitable causes are worthy. Charities would expand to provide the equivalent of health care subsidies now paid for through Medicaid and Obamacare, to provide unemployment compensation, food and housing assistance, etc. as determined by the priorities of the individuals contributing directly to charitable causes in lieu of paying taxes to the IRS.

Taxpayers could choose to pay the charity tax to the IRS in which case the politicians would allocate the exact amount so paid to the same private charities supported by taxpayers.

Under this proposal, society as a whole would continue to be progressively compassionate as the share of total dollars available for charitable causes would not decline, and Congress and the President could vote to increase the “compassion” percentage (for example, from 21% to 22%). Charitable organizations would be more accountable to their donors than government is to taxpayers, contributing to better outcomes. The role of government would be limited while our society would remain compassionate toward those needing help.

Let’s pursue this American solution to our country’s social challenges.

Regards, Pete Weldon

2 thoughts on “Privatize Government Charity

  1. This would just cause the government to force the taking of money through people’s pay checks. You are saying that it is bad if the government takes our money without our consent and spends it on welfare. But then you said the government should have a 21% “charity tax” wherein they force us to contribute money to charity for things like helping the poor or other charitable causes. If you think it is bad when people’s money is taken without their consent, then why do you want the government to impose a charity tax on people?

  2. I think you misunderstand. The “charity tax” is that portion of the current income tax you pay to support the current federal charities such as medicaid, food stamps, housing subsidies, etc. I am proposing that you would get a dollar for dollar tax credit up to 21% of your income tax due for direct contributions to 501(c)3’s (not for profit charities). This takes that money away from the government and lets each taxpayer determine how they want their mandatory charitable dollars spent. I agree that it would be better not to have any “mandatory” charity payment at all but that will never fly. The purpose of my proposal is simply to get government out of the charity business while keeping the same total charitable dollars in the system.

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