[beefield]

Okay, I think I have some weird blind spot here. I have really hard time understanding the reasoning behind philanthropy being a societal good that should be subsidized by taxpayers.

Let's take econ 101 and revealed preferences. It is obvious that if you give 100 bucks to a charity you get utility worth more than that 100 bucks. Otherwise you would not do that. And there is zero difference on the mechanics there if you compare to buying a movie ticket. Watching the movie gives you more utility than what the ticket costs. So, from the point of view of the donor we can think charity nothing more, nothing less than entertainment, and the question is, why one type of entertainment is tax deductible while another is not?

If we compare these transactions not only from the donor's point of view, we notice a clear distinction in power balance between those. The movie ticket transaction is relatively power neutral. Both sides have roughly equal say in the contract, both are taking part of a balanced business transaction. Charity then, is far from being power neutral, the donor has all the power in their hands. Not exactly a reason for charity being the tax-subsidized transaction here.

But charity makes good things. Like... creating a job for a movie teather cashier is somehow not a good thing? Nope, not convincing either.

As said, I have a blind spot here. I find no serious reason why charity should be subsidized. Yes, it feels good and makes good, but so do normal business transactions. If you think that charity is somehow better way to organize social security for the poor than government-tax-mandated social security, think again. (hint: prisoners' dilemma) If you think that you would like to support poor voluntarily, but not by force, you do not understand (or want to understand) that that does not result to sufficient support for the poor.

[jrumbut]

It probably exists for cultural reasons, but you can also view it as a form of decentralized decision making.

The government is saying to the citizens, if you see a problem so pressing it motivates you to altruism, we'll trust that it was important enough that you don't need to pay taxes on that money.

I like it conceptually since central authorities tend to have lots of blind spots. Like a lot of white collar crime issues, enforcement of what rules there are is lacking.

[ClumsyPilot]

> lets take econ 101.. from the point of view of the donor we can think charity nothing more, nothing less than entertainment

Sounds like you failed econ 101.

If you only take the viewpoit of a sociopath, you will miss some crucial detail, like empathy, which is the reason people donate.

I donate because want to stave off ecosystem collapse, but you come across as the kind of person that would rather invest 2 billion in personal bunkers than 1 billion in ecosystem restoration, because the former is 'value' and the latter is 'entertainment'

[concordDance]

Subsidize things with positive externalities (e.g. territorial defence) and tax things with negative ones (e.g. industrial processes that pollute the air).

In this case the donor gets his entertainment and good feelings and as a positive externality a child doesn't get malaria.

[barry-cotter]

> tax things with negative ones

Graduate degrees, pollution, loud cars/motorcycles, ugly buildings, mountain climbing, alcohol, marijuana, fashion magazines. So many possibilities.

[concordDance]

I get 2, 3 and 4. A bit unsure how the logic works for the others? Mountain climbing could cause damage to the mountain I suppose...

[barry-cotter]

Taught Master’s and second entry degrees like MDs and JDs are bad for different reasons. The first enable credentialism, which should be discouraged which tax does. Second entry degrees are just bad. Make people spend seven/eight years of their life in college instead of the three/five/six that’s common outside the US and wannabe colonies like Canada or South Korea.

Mountain climbing results in dead people and large hospital expenses and mountain rescue teams rescuing people.

Most alcohol is drunk by alcoholics. Most marijuana is ingested by people who spend over three hours a day stoned. Both of those are bad and should be discouraged. Alcohol probably causes more economic damage than every illegal drug combined.

[concordDance]

"Bad" isn't enough, needs to be external to the participants (hence the term externality).

As you point out, there are externalities here of sorts. Government healthcare is often considered bad by libertarians as it seemingly gives the government the right to control people's lives (e.g. oblige they do exercise or not eat red meat or not have unprotected anal sex or whatever) in the name of reducing the costs on the healthcare system.

That said, if an opt-out was allowed to be used by the mountain climber or couch potato or go karter or bare backer that states the government has no obligation to help in the event of a bad outcome caused by their activities then the "externalility" disappears.

This is noteably NOT the case with the more classic examples of externalities such as pollution. Doesn't matter how many waivers the polluter signs, other people still get lung cancer.

[verisimi]

It's a tax wheeze.

When Bill Gates or some other billionaire allocates some portion of his wealth to his foundation, this is tax he doesn't need to pay and can write off. The foundation needs to appear to be doing good, but it can also develop his other financial interests.

I think it's better thought of as tax efficient part of public relations spend.

[s1artibartfast]

The moral and economic arguments are pretty simple.

From the economic perspective, If someone gives $100 to charity, and a gets a $20 tax deduction, this is a net positive. Ostensibly, the point of government is to help people, and the point of charities are to help people. In reality, Half of that $20 tax would have gone to building bombs, so it is more like $10 vs $100.

From the moral perspective, charitable donations are set apart from other transactions because there is no quid-pro-quo, so more good is done. When you buy a movie ticket, a significant portion of that goes creating the product you receive (paying the movie studio, building the theatre, paying investors). With a charitable donation, the idea is that that more good is done because you are forgoing receiving any goods or services.

[therealdrag0]

FYI: 50% of tax doesn’t go to bombs, or defense. Like 20% does and most of that isn’t bombs :)

[s1artibartfast]

I was being hyperbolic so this is a valid correction. Understanding military spending is tricky through because it often doesnt come out of the military budget, as retirement and medical support are counted elsewhere.

[xnorswap]

> if you give 100 bucks to a charity you get utility worth more than that 100 bucks

I find that a very odd statement to make. It is a statement that actually denies that people can act charitably at all. It comes across to me as a statement routed in a complete lack of empathy.

I'm not disagreeing with your overall point that actually less reliance on philanthropy and more tax funding of welfare and initiatives would be a benefit, just that I strongly disagree with how you get there, that all charity must be a utilitarian endeavour.

[christophilus]

I was going to say the same thing, and yet…

Let’s say that you give someone $100 so that they can feed their family. The good feeling you get, and the sense of justice, etc is worth $100 or more to you. Therefore, you got at least $100 utility out of it.

Maybe? That’s what I’m guessing the OP meant.

[_dain_]

You don't do it for a good feeling, you do it so they can feed their family.

[exdsq]

It’s okay if altruism is inherently selfish and for a warm fuzzy feeling or social media points as long as the altruism takes place

[ClumsyPilot]

This comes across as divorced from reality - this is not why most people donate

[Diggsey]

What's the difference between someone who donates because it makes them feel good (to have a positive impact on the world) and someone who does it because they want to have a positive impact on the world?

There isn't one. It's the same thing.

All choices can be traced back to a "selfish" reason. To deny that is to suggest that there is something other than our self that determines if we are a good person or not.

[exdsq]

This comes from a lot of reflection on ‘selfish altruism’. You might think it’s divorced from reality but I’ve had to argue for altruism existing far too many times in England to not think about it more. It’s probably the cause of donating far more often than you think, just people rarely admit it.

[newsclues]

Charity should fill the gap left by the government services and the market. (Government food stamps, charity soup kitchens, grocery stores)

But charity became its own distorted industry.