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September 07, 2007

Rich People, Ballet, Taxes

Tim Lee says "we have to remember that many rich people give a significant fraction of their wealth to charity...some of us simply suspect that, on the margin, leaving a dollar in the pockets of a rich guy is more likely to lead to that dollar being used for a worthwhile purpose than giving that dollar to Congress to spend...it’s an important part of what drives anti-tax attitudes in broader electorate." Yep: They're not saying "don't tax me," they're saying "I believe these dollars would be better spent by wealthy individuals who really, really, really care about ballet."

But Tim's a stand-up guy, so if he says he believes this, then I believe him. But it seems bizarre. I know of a lot of right wingers who think a dollar left in a rich person's pocket will be more productively used than a dollar given to the government, but I don't know of any who say that that dollar is more likely to travel down the income ladder and guarantee health coverage to the poor, or pensions to the impoverished elderly.

Indeed, if you're searching for a substitute for the social safety net, much of the philanthropy that the rich engage in seems poorly targeted, to say the least. The Center on Philanthropy conducted a study on how much charitable giving was directed to helping the poor. They found that giving to help meet the basic needs of the poor is a mere 7.5% of total giving, while "other" donations that directly or indirectly help the poor are around 23%. The rest goes to alumni associations (a surprisingly huge money suck), arts and culture, and so forth.

September 7, 2007 in Taxes | Permalink


Arianna Huffington allows that she found out basically the same thing: at first, she took her fellow conservatives at their word, that they wanted general improvements in society, including helping poor people, but that they just thought that The Evil Government was the wrong way to do it. Cue the standard line about The Evil Government "getting out of the way" so that all that rich people money could find its way to the deserving poor folks.

Of course, when she went around to her wealthy cohort trying to drum up actual money for said good works, everyone she talked to seemed to prefer creating new museum wings or funding Palm Beach 'charity balls' to, y'know, actually chipping in for the unwashed masses.

Posted by: Captain Goto | Sep 7, 2007 12:50:46 PM

Maybe the poor can start letting their benefactors put their names on them with shiny brass nameplates. That always seems to open up the wallets.

Posted by: AJ | Sep 7, 2007 12:56:16 PM

So are you saying that we need to keep the estate tax to make sure that plenty of money goes into Alumnai associations?

Posted by: Dave Justus | Sep 7, 2007 1:06:39 PM

It may not be so much a case of these dollars being best "spent by wealthy individuals who really, really, really care about ballet," but rather a case of "giving this money to Congress to spend is almost certainly going to result in it being squandered."

Rather than a statement of confidence in rich folk, it's a commentary on relative faith in Congress.

Posted by: TW Andrews | Sep 7, 2007 1:17:51 PM

No, we need to keep it because that money should go into social programs run by the government.

Posted by: Ezra | Sep 7, 2007 1:20:34 PM

We shouldn't have taxes because having a new yacht full of hookers is much more important that making sure infants are properly fed. Or that their food is safe. Or their daddy won't die because he was driving on an unsafe bridge. Or their mommy gets proper prenatal medical car. Or... well I guess you get the idea.

Posted by: justawriter | Sep 7, 2007 3:03:34 PM

I generally only hear really, really naive or really, really stupid conservatives make the argument this way. Most of them who make the "trickle on economics" arguments argue that, as you say, an extra dollar in the pocket of a wealthy man will be invested into a company to create new jobs, which will help the poor by giving them work.

I do know a couple of people who were really, really naive conservatives who have become hardcore angry liberals because they were sold on this line of thinking before getting out into the real world and finding out exactly how stingy rich conservatives actually are when it comes to actually helping the poor. They also happen to be hardcore Christians belonging to a mainstream denomination (Methodist), and I suspect that their "conversion" to liberalism came about because of their religious views (in a somewhat ironic twist these days).

Posted by: NonyNony | Sep 7, 2007 3:17:56 PM

"Most of them who make the "trickle on economics" arguments argue that, as you say, an extra dollar in the pocket of a wealthy man will be invested into a company to create new jobs, which will help the poor by giving them work."

And of course in the real world the rich seem to rush to buy up a company's stock when they CUT jobs! I think Ezra (or some other economically focused blog) once had a post about the percentage of investment that is actual tied to new companies or job creation and it was a rather pitiful amount. Most investment is in proven commodities on the stock market not on new job-creating ventures.

Posted by: Ricky | Sep 7, 2007 3:44:48 PM

Didn't Congress used to spend money on art, music, and theater? Didn't we make them quit? I don't understand!

I do know that in Palm Beach County Florida, competition for charity dollars is fierce. The charities that win are ones that take money for capital improvements that can be named after the benefactors. However, institutional charitable foundations are chipping in money to provide health care for the poor. They buy malpractice insurance and doctors provide care for free. Pretty cool.

Some foundation boards take their jobs seriously and some don't. I can cite examples of both.

People who believe government is incapable of functioning are using instances of dysfunction to make a generalization. They just don't know about the many nasty examples on the other side.

Posted by: Bob Calder | Sep 7, 2007 6:05:19 PM

I remember hearing someone argue that looking rationally at where Americans put their charity dollars, the amounts given to higher ed just stick out like a sore thumb-- not that they don't do any good but it's just way out of proportion to what you would invest if you were allocating $ by some sense of need and benefit.

Posted by: Doh | Sep 7, 2007 9:44:31 PM

Every year or so a conservative columnist comes out with a column proclaiming that red state folks donate much more to charity than blue state residents. I've always wondered how much of that difference was church goers donating to expand the size of their church or put in a new day care center so they can attend all day services.

Posted by: Col Bat Guano | Sep 8, 2007 11:21:09 PM

Hey people..I am a christian Guy from Israel..who his Age is 22.. if Anyone wwannna help me add me on this email PLease juuj.b@hotmail.com I live In nazareth city I am dyin to study but i have no money,my mom and my dad are sick they don't work..plus there relativez don't look at us they don't help us.. we barely eat 1 meal in 3 days..Lifes being so cruel But Im a good believer.i believe in Jesus that he is with us all the time although we are goin thro hard life but im patient cuz someday he will help us i have a hope from u people if anyone wanna Help PLease do it..Bless you all rich people!

Posted by: Poory | Sep 17, 2007 2:05:37 PM

My name is Raema Ellis Areosa. Hi I am trying and I hope I may find a organisation or people that can help me in helping the poor children in Mozambique.

I am in Chimoio center of Mozambique. I am 21 years of age. and I have come to know the lord Jesus. I have always dremt of helping children in some way. It feels that The children here are being left out from the world they need to know so much.

They need a place where they can have 2 meals a day and have art , craft,Bible, English & Maths Lessons because a child of Grade 4 can not even write 'BOLO' which means cake in Portugues. And fo me it is sad because the teachers here concentrate on the end of the month to get their salaries.

I do not earn more than 300$ US from my salary and have started a small classe this week and I Know that I will be having lots of children.

What We need is someone to contact me Please.


Posted by: Raema Ellis Areosa | Nov 12, 2007 5:05:50 AM

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