Tax the Rich More? or Less? editor notes issue #68

Finally, a tax debate that's fun to watch.

Most of the time, most of us in community-based organizations believe that the wealthy in our society -- whether individuals or corporations -- don't pay their share in taxes. The recent revelations have been stunning but we had already guessed that neither corporations nor the wealthy pay much in taxes.

We know better than to argue this case to foundations or to most donors: after all foundations are based on wealth and are typically founded (and controlled) by wealthy people. However, the Obama administration's proposal to cap the charitable tax deduction for households with more than $250,000 per year in income has made it harder to avoid the issue: Should the charitable tax deduction -- which overwhelmingly benefits the wealthy -- be raised or lowered? In other words, should you cut taxes to the wealthy (against the Obama proposal) or keep them the same (support the Obama proposal)?

Foundations -- even the progressive ones -- have long lined up on the side of "the more that donations are tax-deductible, the better." For example, in the debate over how much can be deducted when giving appreciated art to museums, foundations have consistently argued against any limits to tax deductions. It's been disappointing, though, to see the big guys in the nonprofit sector who purport to speak for all of us -- like Independent Sector -- come out against limiting deductibility.

We like the fact that progressive activist Kim Klein has dared to call for the charitable deduction to be abolished altogether, a point of view shared by Republican former Senator Pete Domenici. Kim argues that eliminating the deduction would only be a "scratch" to giving, and challenges "us who work in and for nonprofits to think through what we believe . . . whether we should be able to save on our taxes while patting ourselves on the back for being charitable, or whether giving should be its own reward." (Domenici, who chaired the Senate Finance Committee when the Bush tax cuts were passed, recently commented, "Nobody would have thought that all these things would have happened after you cut taxes … that you'd have two wars and not pay for them. That you'd have another recession.")

And let's remember that most taxpayers, especially those with lower incomes, do not itemize deductions on their tax returns. If you are not claiming deductions above, for instance, $11,400 for a couple, you don't need to itemize.

A foundation program officer recently said to me, "We shouldn't support anything that reduces giving to the nonprofit sector." Applied to tax policy, this could mean that no one should pay taxes at all.

We in community nonprofits like to think we're on the same side of most issues, but on this one it's a little fun to see so many people squirming uncomfortably. Ask your co-workers, co-volunteers, and board members what they think about this, and how much their own giving is affected by the tax deduction. It could be the most values-centered discussion you have all year.

* More than 88 people have commented on last issue's First Person Nonprofit article by a founder who was fired by the board. Next issue we'll hear from some board members who have participated in firing a founder.

* In this issue, arts hero John Killacky tells about his regrets as an arts funder. We also discuss nonprofit board myths, hear from Ask Rita on drunk employees, and, just in time for the 4th of July, a 3-minute vacation with Morgan Freeman. What a mix.

Have good week. -- Jan Masaoka

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Comments

Thank you for having such a great website -- I think it is just great!

This is a great article, and I’d like to add two points to it:

1) When the top tax brackets drop, the value of a charitable gift, even for those who itemize, also drops.  Under Reagan, the top tax bracket was 50% and so $1.00 donation saved the donor $.50 roughly speaking. So if you want to encourage giving, you would promote taxing wealthy people at higher amounts and raising capital gains tax  to be the same as income tax.  Too often, the very large institutions who purport to speak for the nonprofit sector actually simply defend a tax structure that benefits wealthy people with both low marginal tax rates, low capital gains and charitable deductions.

2) Even though the top tax brackets have gone down dramatically in this decade giving went up until the recession. Private sector giving went from $200 billion in 2000 to just under $300 billion in 2008. As you note, 71% of Americans file a short from and  receive no tax benefits for their giving, and study after study has shown that the vast majority of wealthy people named ‘tax incentives’ as one of the least important variables in deciding how much to give.  Defending tax policy that benefits wealthy people under the guise of protecting charitable giving lacks both integrity and historical accuracy. --Kim Klein

Kim, you are....well....hmmmm....Amazing? Misguided? Uninformed?

You really don't have a clue do you. Am sure you voted for the loser we have as president because you do not understnad the simplest fundatmentals of economics, and neither does he. I assume you are aware that paragraph #2 above completely refutes paragraph #1, right?

Let me ask you some questions and just give me a yes or no answer. These are questions dealing with how money works within the framework of a capitalistic free society knowlege of which should be required before you can speak to or for any charitable organizations or group or organizations involved in charitable activities.

1. Does increasing the minimum wage reduce poverty? (just y or n....no socialist BS). 2. Does creating rent control policies in urban areas reduce rent for the poor in those areas? (hey, I said Y or N only)
3. Does increasing the top tax rate to 50% increase the amount given to charities? No, I did not say "the incentive to give", I said "amount given". (Y/N?)
4.Does giving the federal government more money to spend via higher taxes (Oh please do not even suggest for a minute higher tax revs will go to paying down the deficit) make you feel good?....make any sense whatsoever?.....even though it is not YOUR money you are deciding to give?

I am always curious about people who "decide" some among us are "making too damn much money!".....First, this position requires that you come up with an amount that in your mind equals TOO MUCH.....ok, let's say for you Kim, that amount is $250,000 a year for a couple (Obama's flinch point evidently).....so now I go down the street, say a street in Harlem, and ask a young waitress at Sylvias (ate there few years ago...very good) and she says $100,000.....then I go to the Bronx and ask a 19 year old unemployed HS drop out....and he says $50,000......I can hear you now....."Hey, that kid doesn't know anything....can't depend on his answer"......why not? He has as much right to pick a number as you do....oh, sorry....you are making $50,000?

I forgot about pseudo intellectual liberals.....they know what is best for all of us and do not require the inputs of others.

Do yourself a big favor. Stop by a Barnes and Noble on your way home tonight and buy the book, Basic Econimics, by Thomas Sowell. Yes, it is about 700 pages, but it is an easy read and even people who think like you do can understand it. What? A conservative Republican reading a book written by a black PHD from Stanford? Sorry to disappoint you as I am sure you labeled me a racist for not voting for Obama, the highly unqualified community organizer who has always believed in rent controls and higher min wage levels....simply because they make him feel good....even he is smart enough to know they do nothing to help poor people. God I love the Law of Unintended Consequences!

Oh, one more question. Please define for me what poverty is in America and include in your definition the estimated numbers of "poor" people, their numbers by age (this will amaze you but yes, it is true...the rate of poverty is highest amoung people between the ages of 18-25.....and you know what...this will kill you....if you follow that specific group that is now between 18-25 yrs old, about 95% of them come out of "poverty" by the time they are 45-50.) Who knew......age and poverty go together. What the hell are community organizers going to do now?
Have you even considered the fact that Obama and his ilk want to get rid of charitable giving so more people will become more dependent on government?
You just go ahead and get rid of that tax break for charitable giving and let's see what happens....you go girl cause you go it all figured out!

I'm disappointed by this comment because, rather than make the points he/she feels so strongly about through open discourse based in respect, he/she relies on rhetoric based in disrespect, name-calling and downright bullying.

I think it is important for a democratic society to engage in discussions where we do not always agree. And, I think the basis of a democracy is that these discussions take place in an environment of open, respectful (even contentious discussions can be respectful) engagement with our fellow humans.

It seems our culture-at-large, and our current representatives, have forgotten how to engage in this kind of discourse.

I think it is all well and good to encourage people to give because "giving has its own rewards." However, the US has the highest level of charitable giving in the world and the reason is our tax laws. This cannot be underestimated.

If you work for a global non-profit and attempt to raise charitable dollars in countries where this is not supported by tax law, then you know how difficult it is to create that "philanthropic culture." It will not exist at the level that it does in the US and raising charitable contributions above the "membership" level will be a challenge. Charitable giving permeates this country across income levels, many of which are reinforced through the deductability of those donations. If this incentive is limited there is no question that donations will decrease to the detriment of thousands of charities which benefit from giving at every level of the donor pyramid.

I would also like to see this argument played out with data. If you are going to write about your opinion on this issue, please provide a link that shows charitable contributions by income level and which levels would be impacted by changes in the tax laws. What about research? Why not put this to a carefully designed quantitative study supported by focus groups at specific income levels. Where is the data?

Thank you, Anonymous above. I agree with the way you put it, that the tax deduction reinforces an inclination to give. And in addition, I believe the tax deduction also makes an important implicit statement about nonprofits that would be hard to replicate without it. In addition, I don't the data is much help. When donors are surveyed, they say that the tax deduction doesn't make a difference, but donors (like everyone) say something different than what they do. Without a controlled experiment we can all only speculate.

I myself am not in favor of abolishing the tax deduction, but I do support the Obama proposal to bring it down for the people in the highest tax brackets. I don't think that a minor difference in deductibility will make a big difference in the marginal amounts of giving. But that's just my opinion. Jan

According to the CBO, in 2005 the top 1% in income collected 18.5% of all income, but paid 27.5% of all taxes, including 38.8 percent of federal individual income taxes, 4.0 percent of federal social insurance taxes (Social Security and Medicare), and 58.6 percent of corporate income taxes (indirectly, through stock ownership).

Those making less than $33,000, half of the population, paid a total of 4% of the overall tax burden. Those people don't get a tax break for their charitable donation, but in reality, they don't account for much in donations anyway.

The reality is, for every dollar shifted from charitable donations to government tax revenue and then redistributed to non-profits, a pretty. Ig chunk gets eaten up by the government in overhead costs. Worse, legislators have become extremely adept at ensuring government dollars flow to constituencies that kick back some of that government largess in the form of political contributions. Part of the problem with the trillion dollar "stimulus" is that it was structured to ensure most of it went to public sector unions, highly likely to fund the DNC, and virtually none was used to stimulate the privat sector economy that actually funds government through tax payments. Two unfunded wars? Bush deficit spending over eight years was less than the current administration borrowed in the first eighteen months. We're currently spending 40-45% more per year that total federal revenue. Even if you confiscated every dollar earned by the top 5% in income, you couldn't even pay the deficit for one year.

Eliminating the deduction for charitable contributions would be appropriate but only as part of a tax simplification effort that lowers overall rates while reducing the number of brackets, deductions, credits and exceptions.

You seem to assume that an individual's earnings and accumulated assets are first the property of the government and that it is therefore incumbent upon "the wealthy" to justify why they should be able to decide what happens to them. In fact, most accumulated wealth that is being donated has already been taxed at least once and in some cases several times.

I'd be willing to bet you see nothing wrong with giving people and businesses tax credits to promote green energy "investment" or permitting people to deduct the cost of their health insurance premiums. If we are going to continue to use the tax code to "incent" certain kinds of activities that some consider socially beneficial, then charitable contributions should be among them.

Your statement: "In fact, most accumulated wealth that is being donated has already been taxed at least once and in some cases several times." may be correct. However the logical question to raise is: At what rate was it taxed?

Most accumulated wealth is taxed at the very low capitol gains rate of 15%, rather than the rates most taxpayers (the middle class) pay. In other words, accumulated wealth grows expendentially in comparison to any kind of savings/investing a lower-middle income individual can achieve. If the capital gains tax were raise say to 25%, we could then incentivize donations. This would allow for much for much larger deductions to reduce overall tax liability for these individuals.

Are you really supporting  Kim Klein? "We like the fact that progressive activist Kim Klein has dared to call for the charitable deduction to be abolished altogether, a point of view shared by"

This coming from a Nonprofit magazine? Wow, unbelievable.

Thanks for this comment, Beverly. I don't agree with Kim on this particular point, but I like the fact that her question challenges us to think much harder and more deeply about the charitable deduction, taxes, and the purpose of government.

And I confess to liking it pretty much whenever somebody challenges the conventional wisdom about anything. When I agree with them of course I really like it, and when I don't agree them I get a lot smarter about why. And in course of thinking over whether I agree with someone or not, I sometimes end up changing my mind.

Thanks for your comment. Jan

Some comments here make quick assumptions about Jan's personal views, but I'm just pleased to see an article that provokes a healthy debate.

Congratulations Jan on stirring the pot!

Thanks, Chris. But I wish this "healthy debate" (as you call it) had a little less screaming and a little more self-examination and reflection on all sides.

Jan,

What we really need to do is to separate the social safety net question into two parts: (1) how big of a social safety net should we have? and (2) who should provide it?

The nonprofit sector is so in bed with liberal politicians that it has totally capitulated to the notion that central Washington DC planning of the management of the social safety net is a given. Those of us who work in the nonprofit sector know that the cost of this capitulation is threefold: (1) top-down decisions that are driven by politics (and let's face it, political payoffs and out-and-out corruption) instead of by cost/benefit analysis; (2) the waste of massive amounts of money in the maintenance of an enormous bureaucracy of highly paid civil servants, most of whom have never met any of the beneficiaries they were hired to serve; and (3) the permanent institution of ineffective government programs that are slow to adapt to changes in the needs in society.

The tax change that needs to be made is breathtakingly simple:

1. What is the cost of running essential governmental programs aside from the safety net? Let's say it's 15% of GDP. Everybody must pay SOMETHING to be a citizen, so let's say 3% on the first $50,000 of family income and 16% on all family income above $50,000. That will pay for the military, the court system, immigration, the FBI, etc..... the essentials, and still remain highly progressive.

2. What is the cost of the necessary safety net expenditures? Let's say it is another 15% of GDP that we decide should be essentially transferred from the wealthy to the poor. Create a surtax, charged on top of the base tax, of say 10% on family income between $50,000 and $200,000, and 20% on family income above $200,000. That should cover the wealth transfer needs .... food, clothing, shelter, education, medical coverage for the poor, whatever else you would call your social safety net.

BUT HERE'S THE BIG CHANGE:

3. Make all charitable contributions to domestic social safety net programs CREDITABLE against the surtax. Every penny of them, so that if an individual thinks the Federal government is the best judge of how to spend social safety net money, he/she can pay the tax to Uncle Sam; but if the individual thinks private charities are more effective and efficient, he can give to charities and will be deemed to have contributed his or her fair share.

Does anyone doubt that in such a tax structure, the vast majority of high income taxpayers would opt to give directly to charities and cut out the Federal government? Such a change in the tax code would (a) unleash massive new capital into the nonprofit sector, (b) result in huge savings in spending to maintain a massive government bureaucracy, and (c) far better engage citizens in the providing of the social safety net -- i.e. create a boom in voluntarism.

Of course, the vested interests in Washington will oppose it, because it would take away Washington's power to make economic decisions for the rest of us. And, to be fair, nonprofits are not perfect and the change to a privately provided social safety net would no doubt be a bumpy one.

However, nonprofits will be far more effective and efficient than the government ... if not, they will fail to continue to attract donations. If a nonprofit organization does a lousy job, its fundraising will be impacted and the social capital will go somewhere else. Individuals will have an annual opportunity to vote with their feet -- something that can never be said for taxpayer-funded government programs.

The debate need not be between conservatives who do not want to provide a social safety net, and liberals who insist that the federal government provide a robust safety net. Split the issue into its component parts: (1) should there be a social safety net?, and (2) who should provide it? There is a third way .... it is still highly progressive but it gets the corrupt, inefficient and permanent government apparatus out of it.

As a libertarian, I would be far more willing to be compelled through the tax code to fund into social safety net programs if I were given the choice of which organizations my money would be used by.

And liberals who believe that the government is so effective in delivering the safety net can still opt to pay their taxes rather than give to charity.

I am surprised that the thought leaders of the nonprofit industry are not advocating for this approach. Perhaps too many of them are so used to carrying water for the liberals that they cannot conceive of another way to skin the cat.

Everyone needs to ponder the question of: If contributions/donations fall for ALL nonprofit organizations due to changes in the tax laws, what will the consequences be for the recipients of the nonprofit services? Who will step in and fill the vacuum? Government? And who will pay for that? This discussion is akin to the one that has been mentioned from time to time by desparate governmental entities, that we should rethink about taxing nonprofits. . Government at all levels has never met a dollar it didn't like! I am sure every reader of blueavocado has a story in their own city or town about financial crisis with their government entities. Why are we in this mess, because government in general is the worst manager of their financial affairs. Very few have figured out that if the private sector doesn't make it, the government sector is in trouble. They give away the store when times are good, and struggle to survive when their source of revenue (business and consumers) have financial problems. This country was founded on incentives (freedom, financial rewards, independence), and penalizing the very people who support the nonprofit sector (for whatever reasons) is shooting ourselves in the foot. With the outrageous estate tax law (which has no contemporary rational), why wouldn't a successful person set up a foundation. Bottom line is...if the private sector cannot be induced to help the beneficiaries of the nonprofit sector, then that only leaves one enity...Uncle Sugar! Then what goes around comes around. Bill Walters Crossroads Diversified Services, Inc.

I read a recent report that middle class Americans donate more of their income to charitable organizations than the upper class.
I also saw a comparison of income & assets of Americans during both the Great depression and this recent so-called recession. The top percentile increased their income and assets, while the rest of the population showed a decline, in fact, regression, to levels known during previous decades.
Where is the job creation the upper class is supposed to provide? We tax the upper class less than most developed countries do. The middle class pays more in taxes than the wealthier population, and if they want to create a foundation they do because they have a passion for it, not because they get a write off.
Employed Americans pay in to Social Security on up to $107,000 of income per year (not sure of most recent data). The Social Security fund could support retired Americans if this was increased. There are valid reasons for increasing the amt of taxes they pay. They do NOT need a break; they should pay an equitable share, just as middle class Americans are doing.

I will be removing my name from this site due to this extremely unsettling point of view. It has been shown over and over again that conservatives give to charity more than liberals many times over. This extremely left-wing liberal view is disappointing and shows a terrible lack of vision. I have enjoyed this site but now am unsubscribing.

God forbid you be exposed to an opinion that differs from yours.

Dear Jan, Thanks for another interesting, and timely, article. The recent initiative by a number of US bilionaires to donate most of their wealth to "worthy causes" suggests that charitable giving is not merely about tax breaks. As such, some statistics would be really helpful. What is the percentage of philantropic giving to religious organizations and causes versus all other causes? What is the level of giving from private foundations versus corporations? What is the total giving from those persons below the $11K threshhold (or what percentage is the contribution from that group)? My own experience indicates that corporate giving is driven to a large extent by personal preferences and relationshhips of the corporate officers, and those factors may play as significant a role in the decision on what to support and how much to give as the tax code. However, my experience is limited, and I would welcome more debate and data on the issue. Lloyd Gardner Foundation for Development Planning, Inc.

So, how about getting government out of the nonprofit business altogether? Quit using government (taxpayer) money to subsidize nonprofits, and eliminate tax deductability. Results: the government will need less tax money, giving the opportunity to decrease taxes and/or decrease the deficit. Good nonprofits doing good work will attract support from the private sector, and those performing less-than-necessary work will fold.

Agreed. Unfortunately, we have spent about half a century teaching both families and non-profit leaders to depend on the government for resource provision. It will probably take a concerted effort over an equal amount of time to reverse those entrenched conceptions. If we can, though, we will have both families and agencies that run leaner and stronger. And agencies will survive or not on the capitalistic bases of ROI to the donor-investor and 'value-add' to the community. Greg Millette

Look at the typical conservative: "You can only answer yes or no, black and white....there is no room for discussion...because we can't be open minded, empathetic, or stand to listen."

Wow Jan, you sure opened a hornet's nest. I am all for healthy discussion, but what strikes me from so many of the comments is that they are very ideological and not based on much information. I suspect that this is because the tax debate has become such an emotional and polarizing issue. As I recall, about fifty per cent of all donations are to religious organizations and I doubt that a change in the tax code would alter religious giving. Also, my recollection is that more money is donated by low and middle class people than by wealthy people, although that may have changed with some of these billionaire donations in recent years -- give Ted Turner credit for starting a billionaire giving spree. What also seems to be clear is that "nonprofits" have become an industry - and an important part of our society -- but they are looking for self preservation first. Somehow, we need to figure out how to have a calm and rational dialogue on what is best for our country and its people and find some middle ground, instead of these knee jerk, sound bite debates we are witnessing.

This is a very interesting and important discussion, but some new things should be said. The subject is too important to be reduced to class warfare by an "activist" whatever that is. First, it must be recognized that all charitable giving is not the same. Giving to churches and religious organizations has a completely different motivation and giving demographic. It includes the vast majority of small donors and is the least affected by tax deduction, both because of the motivation to give and the smaller incomes of those donating. Secondly, the comment about most people not itemizing deductions is true, but the standard deduction is now high enough that it gives a very nice deduction to small donors, who overwhelmingly are not deducting mortgage interest and real estate taxes, probably a much bigger deduction than they would have if they did deduct their charitable gifts. Third, some areas of charitable giving are overwhelmingly supported by high income donors. Take the arts and culture areas. Our government gives a pittance to these organizations, certainly in comparison to other western countries. It is an area which could very well be supported by government (i.e.all the people) but is not. When high income people give to the arts, and take a tax deduction, it is in effect a partial government gift, in lieu of a direct gift. The same is true of large gifts to higher education and hospitals. Without direct government giving, or indirect government giving through the tax deduction, these areas would suffer fatally. The deduction of charitable gifts is clearly a motivation for donations - whether it is the only one, of course not. But it is naive to assert, as Kim Klein says, that giving should be its own reward. Perhaps in a perfect world it should be, and to some degree in religious giving it is, but try to raise any meaningful funds for non-religious purposes without a tax exemption. From Bill R.

Jan, I appreciate the monthly newsletters, too. I didn't receive this one until yesterday afternoon and just read this article and accompanying comments this morning. My main concern is expressed really well by Bill Walters. I am compelled to respond to Kim Klein's points. 1. Her first point confuses me. With the top tax rates going down and charitable giving going up from 2000-2008, does this not indicate a cause/effect relationship--reducing tax rates low for the wealthy results in increased giving? --Suggestion: can Kim collect data supporting the hypothesis that raising the top rates does not reduce giving? If there is inconclusive evidence there, maybe she could get really creative ("lies, d-- lies and statistics") and widen the research to ascertain the net gain in support for community-based organizations via higher top tax brackets through increased gov't support (which seems to be an unstated "incentive" of proponents of Pres. Obama's plan; thus, my concurrence with Bill's comment above). I am not proposing these steps as a scientific measurement, but it would at least give Kim something to cite that actually supports her position. She needs something more than angry, class-warfare rhetoric. 2. She states that 71% "of Americans" file a short form and receive no benefit from the charitable giving deduction. She probably means that 71% of those who file use the short form. Her statement is true but misleading. By default, filing the short form negates any benefit from itemized deductions. Her point ignores the benefits of the Standard Deduction. Nearly half of those who file do not need the benefit of the charitable giving deduction because they have zero tax liability. (They file to regain possession of their withheld income and to claim funds due them through refundable credits.) Furthermore, the rest of her statistical group could itemize and claim their charitable giving, but they choose not to because the Standard Deduction is higher than their itemized deductions would be. Kim claims that 71% of Americans are missing out on a benefit afforded the rich when, in reality, all who forgo that benefit do so to enjoy a greater benefit. --Suggestion: Before they file their taxes every year, Kim and her abolitionist compatriots should conduct accountability checks to make sure none of them are taking advantage of the charitable giving deduction. We would not want them following the example of Pres. Obama who advocates aggressively that the rich should pay their fair share on the one hand and then takes advantage of every deduction, credit, and exemption available. He reduced his tax liability by a total of $514,000 in 2010 and $308,000 in 2009. If one focuses only on the charitable giving deduction, he would have paid $200,000 more of his "fair share" for the 2 years. In addition, he avoided a tax liability of $490,000 in 2009 by donating his Nobel Prize funds to charities. I am glad that the deduction was available for him and Michelle to take advantage of, but he really missed some opportunities to lead on this issue. Tony Turley Program Manager

The only thing "stunning" about the "recently released revelations" concerning taxation to which you refer in  your article is how factually wrong your assertions are and how casually you toss your unfounded beliefs out there without any supporting evidence. I challenge you to include the following chart, prepared by the IRS, in your next email so that your readers may benefit from the truth of the matter.

Please note that the top 5% pay 58.7 % of income tax and the bottom 50% of wage earners pay virtually nothing.

Reducing or eliminating the tax deduction for charitable contributions has been shown to reduce overall giving.

Further, your Left wing political views have no place in this forum.  You abuse the privilege that has been given to you when you do so.  Please restrain yourself in the future from falling victim to this temptation. -- Mark Sarrow

Mark, I'm sorry you think progressive political views have no place in a forum where people are discussing how best to achieve positive societal outcomes. Thank you, in any case, for the IRS statistics. Data integrity is worth bringing to the fore, but it would be nice if one could avoid making sweeping political judgments here. I agree with you that the tax deduction for charitable giving should probably not be capped. At current tax rates, the social sector earns $3 for every $1 the federal government foregoes in the form of income tax revenue from those making over $175,000 or so. The social benefit of that threefold ROI is too good for any sensible government to abandon. Plus, it turns out the Ebenezer Scrooge stereotype does represent a sizable number of those who earn over $250k! In the absence of incentives, unfortunately I think it's too optimistic to presume that they will exhibit the same generosity people who make less money routinely show. However, I want to point out that the 5% who pay 58.7% of the income tax do make 34.7% of the money (compare that to the 21% they made in 1980). I'd also like to invoke the democratic values I think most of us in the nonprofit sector share, which are jeopardized when we claim that the absolute wealthiest members of society should be able to make all the decisions about what causes are worthy of support, and that a democratically elected government is necessarily inferior at providing for society's needs. I've covered this somewhat in my blog response to this post, which is here: http://matthewsouther.blogspot.com/2011/07/when-nonprofiteers-want-tax-b... -Matthew Souther

Matthew, I just want to applaud your phrase: "the wealthiest members of society should be able to make all the decisions about what causes are worthy of support, and that a democratically elected government is necessarily inferior at providing for society's needs." That's exactly what the fawning attention to billionaire givers is based on, although the proponents of such don't recognize its basis.

Thank you Mark for showing the data---it would be wise for others to do the same. There are so many conclusions drawn above from what someone "read" or "saw." We all know that many blogs, news article and people's personal views are out there, everywhere. It's the actual, correct data from reliable research agencies and government sources that will allow us to more acurately interpret what could be if changes were made. This is a thoughtful venue for spirited debate, but everyone needs the facts, please! Anne

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