"It must be borne in mind that an exemption means a relief to A at the charge of B. It is not fair to impose (the cost of exemptions on) the fathers of children, men laboring to support their wives and families." The flaw in nearly all the arguments against tax exemptions for charitable donations is that they are seen as a cost on the part of government. The Economist sites the US Treasury's projection that tax breaks for charitable donations will reach $39.6bn in 2012 and $59.6bn in 2014. But the mere fact of seeing them as a cost to government assumes that the government has already got its hungry hands on that money, and gives it up as a subsidy. This view is erroneous. Money that an individual gives away to others who need it more or who are doing valuable work for the disadvantaged, should not be seen as earnings or as spending. It should be seen as the forgoing of earnings by an individual or corporation for the sake of a cause higher than their own needs. By providing a tax break on these donations, the government and therefore, we as a civilized society, are recognizing the value of these philanthropic contributions. Furthermore we are recognizing that these contributions diminish the load on the treasury to support the underprivileged.My argument does not reduce the need for government to oversee and monitor the integrity of the donations and of the organizations who benefit from them. On the contrary, that role for government becomes even more important to limit abuse of the system. The first responsibility of government is to protect people not only from violence but also from fraud. Tax breaks for charitable contributions, is part of the way a government protects the needy among its citizens. If an online effort on behalf of a school bus monitor abused by a few nasty children could raise $650,000 in weeks, couldn't we as a society take care of our underprivileged? And if we did, wouldn't we be a great civilization? And if the government continued to support us in these efforts wouldn't it say so much about who we are as a nation?
The Economist's briefing on tax breaks is troubling on two fronts: Firstly it predicts the imminence of Congressional attempts to claw back tax benefits for charity, and secondly because it ignores the heroic virtue of charity, treating it instead from a simple perspective of cost to the Treasury and financial benefits to the nation. Robert Reich's argument that charity is a choice on how to dispose of income and as such constitutes consumption no different from spending on luxuries is the most morally sterile view in an already morally empty article. The value of charity and whether or not it should be tax deductible needs to be seen through a philosophic lens not a commercial one. Every society has charitable needs ranging from poor individuals who cannot sustain themselves to complex organizations whose work is valued by society but cannot or should not be designed to generate profit. In civilized societies these individuals and organizations will mostly be provided for either by State support or by individual and corporate philanthropy. By disincentivizing individuals and corporations from giving charity, the burden falls on government. This is wrong on two counts: Firstly giving charity is a value; it is a virtue. Values are the expression of beliefs held by real living people. Virtue is not the clinical activity of faceless bureaucrats whose dispensing of charity is no expression of their own beliefs and values but just a job and a way to extend the reach and power of a growing governmental web of control. Secondly, we will be a poorer nation if the act of personal and corporate charity is abdicated to a system instead of a moral choice of countless individuals. There are many arguments against tax breaks for charitable contributions. For example, the rich get bigger breaks than the poor. Or as Gladstone, Chancellor of the British Exchequer said in 1863 (quoted in The Economist article) when he tried to remove tax benefits for charity: