Some years ago, a Wall Street Journal article began with:
The rich are different. They don't give as much to charity as the less well-off, at least by one measurement.
Many wealthy taxpayers gave a smaller percentage of their investment assets to charity than those in lower wealth groups...
People have long measured their giving as a percentage of income, rather than assets. ... However, many wealthy people hold far more in their investment portfolios than they earn in income, so wealth might be a better measure of giving for them...
...
Tax-return filers who earned between $200,000 and $10 million gave only 0.48% of their investment assets to charity in 2001. By contrast, less affluent taxpayers who earned $25,000 to $200,000 in income, and who held average investment assets from $83,000 to $490,000, gave about 1.01% of their wealth to charity.
As suggested in the Wall St. Journal article, the difference between income and assets makes charity statistics based on income look more favorable to the wealthy - but that's really illusion. It is also important to keep in mind while considering such figures that the point is not that the rich should be giving back the same percentage as the less fortunate - they can afford to and should be giving a
higher percentage.
A 2010 New York Times article discussed charity in the context of arguments that the rich should have low taxes, but would give to charity. Even using the figures in terms of income rather than assets, the facts were stark:
The problem is that the exceptional philanthropy of the superwealthy few doesn’t apply to the many more people defined as rich in the current debate over the Bush tax cuts — individuals earning over $200,000 and couples with revenues over $250,000. For decades, surveys have shown that upper-income Americans don’t give away as much of their money as they might and are particularly undistinguished as givers when compared with the poor, who are strikingly generous. A number of other studies have shown that lower-income Americans give proportionally more of their incomes to charity than do upper-income Americans. In 2001, Independent Sector, a nonprofit organization focused on charitable giving, found that households earning less than $25,000 a year gave away an average of 4.2 percent of their incomes; those with earnings of more than $75,000 gave away 2.7 percent.
An
article in The Atlantic notes the lower-income people not only donate a higher percentage of their incomes, but:
The relative generosity of lower-income Americans is accentuated by the fact that, unlike middle-class and wealthy donors, most of them cannot take advantage of the charitable tax deduction, because they do not itemize deductions on their income-tax returns.
In effect, the percentages attributed to the wealthy is higher than the actual change in their assets because they get back part of their donations in lower taxes. For practical purposes, the percentage they give is worse compared to lower-income people.
The Atlantic article also tells us:
Wealth affects not only how much money is given but to whom it is given. The poor tend to give to religious organizations and social-service charities, while the wealthy prefer to support colleges and universities, arts organizations, and museums.
Much of what the wealthy donate isn't for the less fortunate, but simply to make ivy league colleges and elite arts even more luxurious. The question isn't just how much the rich should be giving back, it's also whether the majority of society has any say in our nation's priorities.
That is why assets rather than income should be the basis for taxation, not just for charity. The majority has the right to decide what is a fair share for each family to give based on their assets, and to decide whether to prioritize giving shelter to the homeless or to add new marble columns at the haunts of those born into wealth.
Currently, the US does the opposite. A person working at an essential job can have his salary in a 39% tax bracket, while someone who is living off a family fortune made generations ago can make 100 times as much money and be in a 20% tax bracket for capital gains. The person working the job must pay Social Security payroll taxes in addition, the idle rich don't. The working person has his real estate taxes go up any time the value of his house goes up, but the rich person only has to pay the 20% tax when he gets some of the money in his hand. No matter how much the value of his investments go up, there's no tax on his increasing assets. That must end. It's time to switch from an income tax to a wealth tax.
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The argument for dependence on charity is dangerous in that it means when non-profit groups run out of donated money they can't continue to help the needy. And, as my earlier diary "A 'Tax' on Humanitarianism" says, it is a burden on the good-hearted and a free ride for the heartless. We've seen the rich don't want to give their fair share either in charity or support for public programs.
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Some other quotes:
"Consequently, among the top thousand ZIP Codes that donated the largest percentage of income, only nine were also among the country’s top thousand richest ZIP Codes."
- Los Angelos Times article
"Historically, charitable giving rises about one-third as fast as the stock market."
- nptrust.org
"Eliminating Turner and Soros from the mix makes the lords of philanthropy look even worse. Taken together, the remaining eight billionaires on Fortune's list gave away just 0.6 percent of their total net assets"
- populist.com
"In a more equitable society, the very well off might indeed have less cash to give. But if a rising tide lifts all boats, that may not matter so much."
- NY Times