Stephanie Strom’s front page story on the charitable tax deduction is remarkable in only one sense: She starts with the assumption that charitable giving is questionable because it takes away tax revenues that the federal government could otherwise be spending for the public’s benefit.Strom rehashes some old (and worthwhile) questions by quoting recent philanthropists. As usual, cultural programs take it on the chin. Is a gift to the opera/symphony/museum really a community benefit? Does it deserve the same tax write-off as a gift to a homeless shelter? When the donor benefits from increased social status, should the gift count as charity? Should rich donors give to poor and sick people overseas (e.g. philanthropy by the Gates Foundation) when there are needy people in the U.S.? Should nonprofit hospitals that provide the same services as for-profit hospitals enjoy a tax-exemption when they don’t provide free care for the indigent? These questions are certainly worth serious discussion but they are so often debated that it’s hard to see what’s newsworthy about them, especially since the members of Congress most worried about nonprofit “abuses”–Senator Charles Grassley and Rep. Bill Thomas–no longer run the committees that could act on their concerns. (Grassley has been replaced by Max Baucus as chairman of the Senate Finance Committee and Thomas, former chairman of the House Ways and Means Committee, has retired. Neither Baucus nor Charles Rangel, Thomas’ successor, have voiced any interest in interrogating tax-exempt groups.)
Strom’s justification for the story is her dubious claim that there is “a growing debate over what philanthropy is achieving at a time when the wealthiest Americans control a rising share of the national income and, because of sharp cuts in personal taxes, give up less to government.”
What’s most interesting is her insinuation that the charitable tax deduction privatizes what ought to be a public benefit that should be politically decided. Or as she puts it, “[T]he United States is one of a handful of countries to allow givers a tax deduction. In essence, the public is letting private individuals decide how to allocate money on their behalf.” That’s one definition of philanthropy.