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Charity Donations VS Taxation Archived From: Finance

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What if the federal government gave us a 1:1 tax credit for each dollar of charity or non-profit group we contributed to? Then we could really vote with our wallets. Are you anti-abortion? No problem. Donate $10k a year to an anti-choice organization instead of paying $10k to the federal government.

Are you for an overseas war? Donate money to the military. If enough people choose not to donate to the military, then there will be no budget for overseas wars. If enough people choose to donate to the military, then we can colonize the entire planet in our glorious image.

It seems to me that such a system would be much better than the current system where we have very little say of where our money goes. We elect representatives to do things with money but theres no many things going on that you cant really decide where the money goes.

Effectively it would be a more direct way to vote on issues you care about most. Its unlikely any one political candidate stands for everything you believe in.

One problem might be that people may choose not to donate to welfare type organizations. In that case, welfare would decrease. If thats the case then its only decreasing because people dont want it. If they did want it, they would donate to it and it would remain the same or perhaps increase.

Do you believe education would remove the burden on the welfare system? Allocate $10k of your tax dollars to education instead of welfare to stop the problem at its roots.

The obvious argument against this system would be that rich people would get to choose everything that we do. If enough rich people chose to donate to an overseas war, then we would go to war even if the middle and lower class people choose not to. However it removes the problem of forcing the middle and lower class (in this example) from having to fund such a war. Personally I would mind a lot less what our military does overseas as long as I dont have to pay for it.


Lets vote with our wallets.


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Damn, it is Friday again?


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tripleB said:Lets vote with our wallets.
The rusted penny in my wallet is voting you off FWF island.


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you need a vacation man
go to a beach

log off from fat wallet


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tripleB said:What if the federal government gave us a 1:1 tax credit for each dollar of charity or non-profit group we contributed to?
Um, we become televangelists and donate all our income to our "churches"?


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Why won't this work? Because it attempts to allocate non-market goods (government services) through a free market system. While such may appeal to the capitalist sensibilities of most FWFers, political science 101 tells us this fails completely for the following -

1) Such a system would be susceptible to all market failures the private world has while having no government component to try to regulate and stop such failures. Nothing is in place to stop all the classical forces that cause private market failures in this case - information asymmetry would emerge, collusion among various government services would start up, and natural monopolies would form.

2) Government services are public goods and unlike private goods cannot be consumed or exhausted (within reason). As with all public goods, each taxpayer believes they have no incentive to pay for them because someone else will. In this case, this means no one pays for them, so we won't have any of the classical public goods like public defense or a police force.

I'd also suspect we would quickly see a tragedy of the commons type scenario evolve quickly over natural resources that are currently regulated.


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magika said:As with all public goods, each taxpayer believes they have no incentive to pay for them because someone else will. In this case, this means no one pays for them, so we won't have any of the classical public goods like public defense or a police force.

Personally I would rather put $500 dollars into a glock to carry myself than pay $500 in taxes to a police department that can help investigate my death after I got killed. Considering that the response time to 911 calls is around 5 minutes in most areas at best, and 99% of police officers typically do 2 brief firearms training sessions per year, I think my tax dollars would be better spent arming myself.


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tripleB said:
Personally I would rather put $500 dollars into a glock to carry myself than pay $500 in taxes to a police department that can help investigate my death after I got killed. Considering that the response time to 911 calls is around 5 minutes in most areas at best, and 99% of police officers typically do 2 brief firearms training sessions per year, I think my tax dollars would be better spent arming myself.

1. Even Glocks jam, so you need to bring out your inner boy scout, be prepared, and buy two.
2. The police are necessary to take thugs off the street so they aren't able to prey on honest citizens. The police could actually do this if they weren't so preoccupied with establishing speed traps and busting stoners over dime bags.


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staci86 said:
1. Even Glocks jam, so you need to bring out your inner boy scout, be prepared, and buy two.


Tap, Rack, Re-Assess, Bang

staci86 said:
2. The police are necessary to take thugs off the street so they aren't able to prey on honest citizens. The police could actually do this if they weren't so preoccupied with establishing speed traps and busting stoners over dime bags.

Speed traps are so profitable though! As are unconstitutionally seizing all assets involved in a dime-bag bust and making the "criminal" prove he didnt buy them with drug money.


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I'm going to have to go with tripleB on this one, only I'd modify it such that we just cut out the unnecessary middleman of the state altogether. It's really easy to mock this position since it goes against all conventional wisdom, but I'll just note two things:

- Any market failure of which I've ever heard could be distilled to either a result of government interference with free choices, or ill-defined property rights which government tends to encourage. I'm not going to hubristically assert that true market failures don't exist, but I've never come across one despite hearing dozens of claims.

- Any proffered government solutions to market challenges will always be susceptible to either growing past any ostensible usefulness or colluding in the problem (e.g., regulatory capture).


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poppies said:I'm going to have to go with tripleB on this one, only I'd modify it such that we just cut out the unnecessary middleman of the state altogether. It's really easy to mock this position since it goes against all conventional wisdom, but I'll just note two things:

- Any market failure of which I've ever heard could be distilled to either a result of government interference with free choices, or ill-defined property rights which government tends to encourage. I'm not going to hubristically assert that true market failures don't exist, but I've never come across one despite hearing dozens of claims.

- Any proffered government solutions to market challenges will always be susceptible to either growing past any ostensible usefulness or colluding in the problem (e.g., regulatory capture).

By definition, market failure can not be the result of "government interference."

But then, FW's rules say that alts and trolls are not allowed, so I can see how you could be confused.


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poppies said:I'm going to have to go with tripleB on this one, only I'd modify it such that we just cut out the unnecessary middleman of the state altogether. It's really easy to mock this position since it goes against all conventional wisdom, but I'll just note two things:

Its not just easy to mock, it won't work. And we've been over why it won't work.

poppies said:
- Any market failure of which I've ever heard could be distilled to either a result of government interference with free choices, or ill-defined property rights which government tends to encourage. I'm not going to hubristically assert that true market failures don't exist, but I've never come across one despite hearing dozens of claims.


This is has already been addressed by ken, but - oh really? No market failures involve government intervention by definition. Market failures occur when free markets, in the course of their normal day to day transactions, are subject to systematic failures due to lack of intervention. And please tell me how the following market failures don't exist:

- Information asymmetry.
- Bounded rationality leading to imperfect information.
- Collusion among market players.
- Trade secrets.
- Natural monopolies.

All the above, minus (reasonable) government intervention, can and do cause systematic market failures.

I could go on, and on, and on...

poppies said:
- Any proffered government solutions to market challenges will always be susceptible to either growing past any ostensible usefulness or colluding in the problem (e.g., regulatory capture).

Not really, but we'll wait for you to explain how all the above market failures don't really exist first. I would also love to hear how this system creates classic public goods like a national defense system where everyone has an incentive to be a free rider and no one has an incentive to pay for it.


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tripleB said:magika said:As with all public goods, each taxpayer believes they have no incentive to pay for them because someone else will. In this case, this means no one pays for them, so we won't have any of the classical public goods like public defense or a police force.

Personally I would rather put $500 dollars into a glock to carry myself than pay $500 in taxes to a police department that can help investigate my death after I got killed. Considering that the response time to 911 calls is around 5 minutes in most areas at best, and 99% of police officers typically do 2 brief firearms training sessions per year, I think my tax dollars would be better spent arming myself.

What about buying that Glock and using to gather 'Charitable Contributions' for a worthy charity? I bet 'Most' people will see the value of your charity and give most generously under the 'Persuasive' charm of those 9mm bullets. It would be Gods work!


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tripleB said:What if the federal government gave us a 1:1 tax credit for each dollar of charity or non-profit group we contributed to?
Be careful what you wish for. Charity donations are tax deductible and all it requires for your plan is to implement a 50% marginal tax rate (which is almost here in NY/NJ when you add ~10% state income tax).


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