Government funding of religious acts of charity
My earlier request for comments on the question of government funding flowing to religious charities drew some strong language in emails and phone calls (but not yet postings - where are you guys?)
Here are a couple of thoughts:
1) Should the government cut a check to a church to deliver charitable aid? There are some strong arguments for the "no" position and one of the strongest is that government certification, inspection, requirements for toleration that contradict tenets of some churches (the concerns about Canadian government action against churches that oppose gay marriage, for example, spring to mind) and so on all tend to follow money. Taking money today is likely to lead to such mandates.
2. Churches (and other charities) already indirectly get government money through charitable coontributions that qualify for tax deductions (and do so by complying with some government mandates - those needed to be recognized as charitable organizations under the Internal Revenue Code). Perhaps this proves point #1.
3. There is a distinction between taking a check to do a particular action (feed X homeless people per night at a shelter) and taking money indirectly via tax deductions. In the latter case, individuals are able to direct (and redirect when misuse of money is discovered) their contributions to those delivering aid in a manner most consistent with the donors' priorities. So #2 is different from #1 - and perhaps expanding #2 is the best way to provide additional funding.
4. This suggests that there ought to be a funding mechanism that allows individuals to divert some proportion of their tax bill to charitable organizations, not in the form of tax deductions but in the form of tax credits. Here's a first draft of how to do this. Amend the Internal Revenue Code to allow the following:
I. In 2006, calculate your income tax bill, including taking normal charitable deductions for 2005.
II. Multiply the taxes due by 20%. The greater of this amount or $1,000 is available as a refundable tax credit if you make a contribution of this amount or $1,000, whichever is greater, to a charity qualified under IRC sec. 501(c)(3). The amount donated is not available on the 2006 income tax return as a charitable deduction.
* Making it a refundable credit allows the poor to divert more than their tax bill (up to $1,000 or whatever amount is chosen) to a charity, protecting the proposal against claims that it allows the rich to promote opera foundations instead of funding affordable housing.
* making it limited to 20% or $1,000, whichever is greater, means that Congress still gets allocate a bit less than 80% (because of the refundable credits for the poor) of the budget, more than enough to cover the kinds of things the rest of wouldn't think of to fund but which are worthy of funding (I suspect 5% would be enough for that but let's give the political process the benefit of the doubt at first).
This would likely produce a large shift of income to various charities. Because of the agency-problem-solving advantages of churches, I suspect a lot of it would end up in the hands of local churches. Moreover, while some people would likely fall for flim-flam schemes from rip-off charities, governments seem to regularly fall for flim-flam schemes too and I don't see any reason to believe that millions of individual decisions would be more likely to be flim-flammed than a small number of bureaucratic decisions. And there would be learning over time, so that the distribution of the money 10 years from now would likely be better than it is in the first year.
I think such a scheme, building on the existing tax deduction program, would avoid most of the problems of certification, etc. that my correspondents have raised because we don't see too many of those now. And it would be immune to cutting tax rates since it would be a tax credit against the total tax bill not a deduction (the advantage of which is reduced by cutting marginal tax rates).
Thoughts?
Here are a couple of thoughts:
1) Should the government cut a check to a church to deliver charitable aid? There are some strong arguments for the "no" position and one of the strongest is that government certification, inspection, requirements for toleration that contradict tenets of some churches (the concerns about Canadian government action against churches that oppose gay marriage, for example, spring to mind) and so on all tend to follow money. Taking money today is likely to lead to such mandates.
2. Churches (and other charities) already indirectly get government money through charitable coontributions that qualify for tax deductions (and do so by complying with some government mandates - those needed to be recognized as charitable organizations under the Internal Revenue Code). Perhaps this proves point #1.
3. There is a distinction between taking a check to do a particular action (feed X homeless people per night at a shelter) and taking money indirectly via tax deductions. In the latter case, individuals are able to direct (and redirect when misuse of money is discovered) their contributions to those delivering aid in a manner most consistent with the donors' priorities. So #2 is different from #1 - and perhaps expanding #2 is the best way to provide additional funding.
4. This suggests that there ought to be a funding mechanism that allows individuals to divert some proportion of their tax bill to charitable organizations, not in the form of tax deductions but in the form of tax credits. Here's a first draft of how to do this. Amend the Internal Revenue Code to allow the following:
I. In 2006, calculate your income tax bill, including taking normal charitable deductions for 2005.
II. Multiply the taxes due by 20%. The greater of this amount or $1,000 is available as a refundable tax credit if you make a contribution of this amount or $1,000, whichever is greater, to a charity qualified under IRC sec. 501(c)(3). The amount donated is not available on the 2006 income tax return as a charitable deduction.
* Making it a refundable credit allows the poor to divert more than their tax bill (up to $1,000 or whatever amount is chosen) to a charity, protecting the proposal against claims that it allows the rich to promote opera foundations instead of funding affordable housing.
* making it limited to 20% or $1,000, whichever is greater, means that Congress still gets allocate a bit less than 80% (because of the refundable credits for the poor) of the budget, more than enough to cover the kinds of things the rest of wouldn't think of to fund but which are worthy of funding (I suspect 5% would be enough for that but let's give the political process the benefit of the doubt at first).
This would likely produce a large shift of income to various charities. Because of the agency-problem-solving advantages of churches, I suspect a lot of it would end up in the hands of local churches. Moreover, while some people would likely fall for flim-flam schemes from rip-off charities, governments seem to regularly fall for flim-flam schemes too and I don't see any reason to believe that millions of individual decisions would be more likely to be flim-flammed than a small number of bureaucratic decisions. And there would be learning over time, so that the distribution of the money 10 years from now would likely be better than it is in the first year.
I think such a scheme, building on the existing tax deduction program, would avoid most of the problems of certification, etc. that my correspondents have raised because we don't see too many of those now. And it would be immune to cutting tax rates since it would be a tax credit against the total tax bill not a deduction (the advantage of which is reduced by cutting marginal tax rates).
Thoughts?
Posted by Andy Morriss on
Monday October 3, 2005 at 6:50am
It's certainly true that changes to the tax code to encourage people to support charity rather than government redistribution would be a positive, but self limiting, step. (The limitation is that charity should be driven by acts of love and compassion, not concern over deductability).
Perhaps not the most realistic post ever.....
On the one hand, this has worked out well for a number of years in the refugee resettlement programs tied into the Department of State. However, there have been far more problematic experiences.
Some time ago, I learned of a Christian post-incarceration program that had reduced recidivism to under twenty percent, vice eighty percent in government programs. State and local officials visited, were very impressed and offered funding. The catch: you have to get rid of all of that "God stuff"! The pastor wisely refused. The same has been the case in feeding programs, where funding has been withdrawn upon refusal to eliminate faith from the faith-based program.
I would submit, we have our charitable exemptions and deductions. They should suffice. More money to do the work always is welcome, but not if the "vig" is too high. And, with government, free money never is free.
In Christ,
Fr. C.