Not all charity is created equal

Commentator Robert Reich

TEXT OF COMMENTARY

SCOTT JAGOW: I don't know if you know this, but the tax laws on charitable giving have changed. The new rules apply to your next tax return, so keep them in mind if you're making a holiday donation. Here's the main point: You need a receipt for every cash contribution.From the Salvation Army to the collection plate at church. So noting your thoughtfulness in your diary won't work as proof anymore.

All told this year, Americans are expected to give more than $200 billion to charity. But commentator Robert Reich says he's a little concerned about where some of the money is going.


ROBERT REICH: Lots of charitable dollars — especially from the wealthy, who have the most to donate — are going to culture palaces: to the operas, art museums, symphonies, and theaters where they spend much of their leisure time. And to the universities they once attended and expect their children to attend, perhaps with the help of what's known as affirmative action for "legacies."

These aren't really charitable contributions. They're more like investments in the lifestyles the wealthy already enjoy and want their children to have too. They're also investments in prestige, especially if they result in the family name engraved on the new wing of the art museum or symphony hall.

Now it's their business how they donate their money. But not entirely, because, you see, charitable donations are deductible from income taxes.

This year, the U.S. Treasury will be getting about $40 billion less than it would if the tax code didn't allow charitable deductions. By the way, the government now spends less than $40 billion a year on Temporary Assistance for Needy Families, which is what's left of welfare.

I can see why a contribution to, say, the Salvation Army should be eligible for a charitable tax deduction. It's helping the poor. But why, exactly, should a contribution to the Guggenheim Museum or Harvard University?

Not long ago, New York City's Lincoln Center had a gala dinner supported by the charitable contributions of the leaders of the hedge fund industry, some of whom will be receiving billion-dollar bonuses in the next few weeks. I may be missing something here, but this doesn't strike me as charity. I mean, poor New Yorkers don't often attend concerts at the Lincoln Center.

It turns out, in fact, that only an estimated 10 percent of all charitable deductions this year will be directed at the poor.

At a time in our nation's history when the number of needy continue to rise, when government doesn't have the money to do what's necessary, and when America's very rich are richer than ever, we should revise the tax code.

Limit the charitable deduction to real charities.

And have a happy holiday.

JAGOW: Robert Reich was Labor Secretary under President Clinton. He now teaches public policy at the University of California at Berkeley.

Comments

I agree to American Public Media's Terms and Conditions.
With Generous Support From...