Crazy U.S. welfare solution: offer charity, get tax deduction?

So, two of the (many) problems in the U.S. is both the ludicrous loopholes that corporations, wealthy business owners, and the upper class use to get out of paying some or all taxes, combined with spending on social welfare. The only ideas being batted around in Congress are 1) cut some or all welfare spending; 2) raise taxes. Both have been stonewalled into oblivion.

So here's the idea: eliminate social welfare on the Federal level AND tax loopholes for the rich and corporations, requiring, as a baseline, that they pay the progressive amount of taxes required normally in the tax code. Save one: any and all charity is a tax write-off.

Said charity includes any replacement actions of ordinary social welfare, such as aid for seniors (social security), healthcare, etc. And of course, provisions must be made to prevent basic abuses like forcing "beneficiaries" into effectively slave labor; violators would be prosecuted.

Obviously, any solution would be implemented slowly, over the course of a decade or two; no one's proposing this happen overnight. It also doesn't touch state-level welfare systems such as unemployment benefits.

How viable of an option is this? If you believe private companies are more efficient, then presumably they won't have as much problem with fraud or abuse. And it's a way for companies to promote themselves in a community.

Additionally: This is not about placing blame for the current deficit, nor is it about defense spending or other parts of the budget. This is about whether an idea like this is just crazy enough to work, or just crazy.

It wont work, businessman own church, school their own children going is often non-profit and can be given charity.

beside charity rule often have their own loophole, like going to Georgia for Hunt, then after return donate the stag head to charity, all the expense of the trip will going to get tax deduction.

Eliminate those, and you'd be lucky to see 10% of the amount going back as donations.

It simply isn't realistic to propose that a completely uncoordinated network of thousands of independent non-profit organizations is going to dispense social welfare more efficiently than a coordinated set of Federal and State governed agencies.

Not non-profit. For profit, as the only means of tax write off.

The same objection still applies. Even worse, actually, since there are far more for-profits than non-profits around.

Anyway, private companies wont invest significant amounts of resources into anything that doesn't improve the competitiveness of the company. Otherwise they fall behind their rivals (it's the free market dont you know). So, unless the tax write-off is better than 100% on the dollar, I dont see this working.

I agree, this is the practical problem. It's a nice idea, but where's the incentive for the rich? "You don't have to pay taxes equivalent to the amount you donate to social welfare charities"? That's just taking money with one hand and giving the same amount back with another. There's no profit in it; it would just be seen as disguised taxation and opposed by the Right for that reason.

Also, a lot of the tax avoidance you would have to prohibit to make this work isn't that easy to control. The US can't easily, for example, stop foreign tax havens being tax havens.

It'd also be worse for welfare. Giving to charities is usually an order of magnitude less efficient than government run services.

^ And yet they've been around for centuries upon centuries upon centuries doing a competent job. Granted most of them were affiliated with religions (which apparently has become the worst kind of taboo) but they existed and did a good job. You cannot in good faith or as a legitimate point say that prior to the government created welfare state there was no help for the poor and less fortunate.

That's an amazing argument. 'Sometimes people do good things of their own free will, therefore forcing them to do good things is bad!'

Now, if only there was some way to get people to do good things regularly instead of being the typical selfish entitled assholes as usual.

^^ It is. It is patently unethical to force somebody to do something benevolent or not if the somebody in question doesn't want to.

There's been a few statistics in the US showing that those who believe in independence and helping those who will help themselves (by and large Republicans politically) are far more willing to donate time and money to charities or community service than those who think government should provide for them.

edited 9th Aug '11 6:00:59 PM by MajorTom

Doing a competent job my ass.

Efficiency means, dollar per dollar, "how many lives can we save" or what-have-you. That's the measurement we have to use in this kind of discussion.

And gee Tom, I bet the same sorts of studies would show that people who believe government can solve problems are happier to pay taxes.

edited 9th Aug '11 6:12:53 PM by TheyCallMeTomu

Tomu:

Seconding this. The further in the past we go, the less helpful charity has been. Why? Because it doesn't do a whole lot of good unless it's planned and organised so that the results are lasting and not just something that'll keep someone alive for another week. Helping people survive just a while longer (in other words, disaster relief) is a noble goal, but if those same resources could be spent to build something permanent - like giving people the means to start a farm or something like that - it's more efficient.

Another reason why charity in the past wasn't as helpful as it is today: today's technology and infrastructure (especially the latter) enables us to give more diverse and efficient aid than before.

Go back 300 years and pretty much all aid was food, and not even good food (as that would've rotten on the way). Sure, it's 100% better than nothing, but with today's infrastructure and technology, we can give a straw with a filter so strong you can drain 3 litres of drinking water out of a puddle and not get anything but water in your system. Granted, 3 litres isn't a whole lot, but you'll make it through the worst with that.

These days, charity is more about building things - like wells - in the target region than it is about helping single individuals seperately. The Red Cross - or at least the Finnish Red Cross - tells you exactly what they can provide with the donation you give. For just a couple of euros, they can provide a family with a big tent that'll last until their house is rebuilt. For something like a mere 30 euros (it might've been even less) thay can provide farming equipment, very basic training and seeds, fertilisers etc - enough to enable a couple of famies to provide their own food from then on, though obviously in some regions this depends on nature.

I'm giving these as examples of how much more efficient modern aid is. The Red Cross is an NGO, but all of this stuff is also done with foreign aid and by UN organisations, with much greater efficiency (despite the failings every now and then) than anything the world has seen before.

Tom:

That's true. But that help was much worse that what is offered today, both by foreign aid and internal government programs and institutions.

No one can deny that some religious organisations have been very generous in the past when it comes to aid. Some still are. It's unfortunate that they've wasted a lot of time, effort and resources converting (which some, though fortunately fewer, religious organisations still do,) the people of the area they were deployed in, but that doesn't remove the benefit that the aid represented.

edited 9th Aug '11 6:32:55 PM by BestOf

Again, it's about opportunity costs. If you can save 5 lives through private enterprise, or 10 lives through the government, it's morally reprehensible (all else being equal-and we can debate the finer points of that issue later) to insist on the former rather than the latetr.

^ And what if the situation reverses itself? You can help 10 people for the same opportunity cost at the private level when the same level helps only 5 at the government?

People like you still advocate the government for blatantly irrational reasons.

Tom, do you understand the meaning of Economies of Scale?

I support government action because I know that big enterprises can do big things. Because reality supports my view, by actually being based on sound logic, rather than empty rhetoric. I am always willing to debate the soundness of my arguments, without retreating or accusing the other side of being "uncivil" when civility has nothing to do with the validity of the argument.

edited 9th Aug '11 6:40:08 PM by TheyCallMeTomu

Tomu never indicated in any way that he'd support government aid over private charity if the latter was more effective.

^^ Yes. And economies of scale has a poor track record in government.

edited 9th Aug '11 6:40:28 PM by MajorTom

That's why Medicare has a radically lower cost than comprable private insurance, and why every socialized health care system is half as expensive as ours.

Stop making up your own facts.

Off-topic and about a person; self-thumped.

edited 9th Aug '11 6:58:58 PM by BestOf

To be fair, this thread isn't about healthcare. It's about welfare.

True.

I only used comparisons of results versus costs of universal and non-universal healthcare to illustrate the point that economies of scale do actually tend to work.

Insurance in general is kind of a fussy issue. You have Adverse Selection going on, and since the "product" you're promoting is Risk Pooling, having the largest possible pool is actually most effective not because of any economies of scale, but just because of the nature of risk. In short, as much as my position is "The Federal government can, if it wants to, allocate resources far more efficiently than private charitable institutions run personally by millionaires," I would suggest that the health care issue is dissimilar enough that it's not a strong enough argument, much to my chagrin.

http://youtu.be/yTwpBLzxe4U

edited 9th Aug '11 7:05:58 PM by Baff