Blogs > Liberty and Power > THE RICH AND CHARITY: QUESTION OF CLARIFICATION

Jan 8, 2004

THE RICH AND CHARITY: QUESTION OF CLARIFICATION


by Liberty and Power


My blog quoting an article from The New York Times showing that the richest 400 Americans give a higher percentage of their incomes to charity than other Americans has provoked some comments from our friends at Cliopatria. Here is what I quoted:

"The top 400 American earners in 2000 provided nearly 7 percent of all the charitable gifts reported on income tax returns for that year, well in excess of their roughly 1 percent share of overall income, according to data released yesterday by the NewTithing Group, a charity that tracks giving.

"The 400 taxpayers with the highest reported incomes in 2000 made an average of $174 million and gave away, on average, $25.3 million that year. Their combined giving totaled $10.1 billion, or 6.9 percent, of the $146 billion in charitable donations that Americans deducted on their income tax returns in 2000.”

Jonathan Dresner thinks that this measure is only “marginally useful” because it does measure charitable giving as a percentage of total wealth rather than just income. He also does not find the comparison to be helpful because “most” of the richest Americans could live off principle and not go broke for the foreseeable future. That is why we have progressive taxation...” Ralph Luker expresses surprise that anyone would be impressed by these figures. He continues: “it wouldn’t take much to show that wealthy Americans use philanthropy, with all of its tax breaks fro them, to persuade middle income Americans proportionately to contribute more to sustain the general welfare in the private sectors.”

I have a several thoughts and questions but, for now, will limit myself to these. Dresner and Luker quibble with the validity of the figures. Fair enough. Does this mean that they believe that the richest 400 are not giving enough? If so, how much should they give? What percentage of giving would impress them as sufficient?


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More Comments:

David T.Beito - 1/8/2004

LOL

Jonathan Dresner - 1/7/2004

I wasn't quibbling with the amount of giving (I'll get to that below), but with the meaningfullness of the measure of giving. I'm not impressed by the differential between share of income and share of giving because the differential between share of wealth and share of giving remains unrevealed. From earlier accounts, and my impressions, if you were to measure giving by wealth, rather than by income, you would find that Americans in the bottom quarter probably outperform the top 400.

Let's face it, any income over ten million dollars a year is pure disposable income, toy money, and the top 400 averaged $174M and gave away an average of 1/7th of that, for which, I'm sure, they were profusely thanked and honored. Assuming they lived like idiots and spent another $25M over the course of the year, or even $50M, they still had $100M.... ok, figure taxation at 40% on the undonated $150M... $40M left to squirrel away in case the next century turns out to be a slow one.

Sure, I'm thrilled they're giving money away (see my comments on donations to the National Museum of Women in the Arts here: http://hnn.us/blogs/entries/2927.html), and I'm even more impressed when they give money to causes that don't benefit themselves, which is why the Gates' foundation anti-disease programs are much more impressive than their computers-in-classrooms initiatives. But why should I be impressed by the charity of people who keep so much more than they need or use? It's just check-writing for the top 400. When they start giving away enough that they curtail their own expenses, or forego luxuries, or even stop getting richer and richer, then I'll think about being impressed.

Mark D. Fulwiler - 1/7/2004

You know what would impress me? Some wealthy person cutting a million dollar check to a working class schmuck like me. Anybody want to impress me? God will reward you and you will really feel good about it. I promise. :-)