Yaron Brook on tax deductions

[George H. Smith]

Earlier today, I saw Yaron Brook (president of ARI) on John Stossel's show. When Stossel asked the panel whether they favored the elimination of tax deductions for contributing to charitable organizations, Brook answered with a resounding Yes. His reason was that the government should not pick and choose which causes are worthy.

That reply struck me as very odd. I would think that limited government types would favor any measure that gives citizens more discretion over how they use their own money, rather than seeing it go down the Federal Rathole. Moreover, more deductions mean more loopholes, and how could any limited government O'ist oppose loopholes?

I don't think I will ever fully understand the Orthodox O'ist mentality.

Ghs

[Dglgmut]

He probably believes that a certain amount of taxation is inevitable, and therefore we should at least be treated fairly in how we are taxed.

[George H. Smith]

He probably believes that a certain amount of taxation is inevitable, and therefore we should at least be treated fairly in how we are taxed.

So how are tax deductible contributions unfair?

Ghs

[Brant Gaede]

Earlier today, I saw Yaron Brook (president of ARI) on John Stossel's show. When Stossel asked the panel whether they favored the elimination of tax deductions for contributing to charitable organizations, Brook answered with a resounding Yes. His reason was that the government should not pick and choose which causes are worthy.

That reply struck me as very odd. I would think that limited government types would favor any measure that gives citizens more discretion over how they use their own money, rather than seeing it go down the Federal Rathole. Moreover, more deductions mean more loopholes, and how could any limited government O'ist oppose loopholes?

I don't think I will ever fully understand the Orthodox O'ist mentality.

Ghs

AS was radical, then after publication Orthodoxy segued over time over to real-world atheistic conservatism called "Objectivism" with a major anti-communism pro-Israel bias. The complexities of reality blew a smokescreen over the simplicity of the AS world. It's too soon for politics! Rand exclaimed after the 1964 election, then she endorsed Nixon, Nixon and Ford, but the libertarians were an abomination to her--read: competition or, if you will, a sanction of the victim bullseye target for her philosophically pure and righteous of heart.

--Brant

[9thdoctor]

I don't think I will ever fully understand the Orthodox O'ist mentality.

Slow down, that's Brook giving his view. Binswanger was on Napolitano's show over a year ago, here's the only reference I can find:

http://www.objectivistliving.com/forums/index.php?showtopic=10797

You can see my comment there from the time, but the link is dead, so you can't watch the show, you'll have to take my word for it about what he said. He said he opposed ending the ethanol tax break on the grounds that he opposes anything that increases taxes. Everyone else on the panel gave him odd looks, Napolitano was rather incredulous as I recall. If that's not Government picking and choosing I don't know what is. Oh, but it's not to do with charitable contributions, yeah, that changes it.

[merjet]

Earlier today, I saw Yaron Brook (president of ARI) on John Stossel's show. When Stossel asked the panel whether they favored the elimination of tax deductions for contributing to charitable organizations, Brook answered with a resounding Yes. His reason was that the government should not pick and choose which causes are worthy. ... That reply struck me as very odd.

It is a weak reply, but maybe he was alluding to the fact that government decides what qualifies as a charity via granting 501[c](3) status, etc. If you charitably give money to your neighbor after a disaster or charitably help pay towards your nephew's college education, you can't deduct that. If you give the money to the Red Cross, or the nephew's college's endowment fund, it is tax-deductible.

[caroljane]

And if you donate to ARI it isn't tax deductible?

[merjet]

And if you donate to ARI it isn't tax deductible?

It is. And if you donate appreciated stock, you avoid the capital gains tax, too!

[goblueram]

I agree with his principle. If the government were not in the business of forced charity, any individual charitable contributions would be completely unrelated to taxes paid for government services. Just because I give money to a needy neighbor, let's say, I shouldn't get a discount on the protection of my property rights, police protection, or any other legitimate government service.

[9thdoctor]

Since Objectivism opposes the income tax there's little point in debating the details from that perspective. You have to argue on premises that you reject at the root. In fact, it can be awfully misleading if you try.

[syrakusos]

I agree with his principle. If the government were not in the business of forced charity, any individual charitable contributions would be completely unrelated to taxes paid for government services. Just because I give money to a needy neighbor, let's say, I shouldn't get a discount on the protection of my property rights, police protection, or any other legitimate government service.

Right, but that is not the situation we have today. In fact, the government engages in a myriad of activities that you did not and would not ask for.

The deduction for charities came to serve the charities established by the rich - Rockefeller Fouindation; Carnegie Foundation - back in the day when only the rich paid income taxes and those taxes were small. The deductions or credits for ethanol or carbon or whatever are different. Those are example of the government "picking winners" and of the favored industries getting the legislature to make their markets for them. I am not sure that a single answer covers all cases.

The income tax credit for interest on a primary home mortgage is another example. The idea that owning your own land was "the American dream" appealed to European immigrants who came from socieites still feudalistic. Those who came from the merchant or other urban walks were less concerned. They lived in apartments. That is the source of the supposedly onerous "poll tax." Farmers owned land the assessments on which were the basis of the taxes they paid. Merchants, lawyers, doctors, clerks, they all had money in the bank, incomes, even large inventories of goods, but no land. So, they insisted that they be allowed to pay their taxes, also, in order that they be allowed to vote. The income tax credit for interest on a primary home mortgage created a society of landed serfs. As noted, however, the money returned to the home owner was put into more productive channels than those that would have been chosen by the government. At least, that's the theory.

[jts]

All taxes should be abolished. Income tax, property tax, sales tax, every kind of tax should be abolished. Tax is theft. Tax is a violation of rights. Government is supposed to protect rights, not violate rights.

Someone will ask how the 773H can government be run without taxes. Maybe we don't need government. But if there is to be a government, it can be run on voluntary charity. That means hat in hand instead of gun in hand.

Someone will say people will not voluntarily donate enough charity to support government. I see that as good, not bad. Government will shape up or shut down. No wasteful spending. If the government is so bad that nobody will voluntarily support it, that means it deserves to be shut down.

No doubt in order to get more charity, government will allow people to say which department of government they are donating to. For example if there is an unpopular war happening, funding for it will be cut, and government won't be able to continue the war. At the same time, if the police department is doing a good job, the police will get more funding. Every department will be motorvated to do a good job in order to get voluntary funding. In this way, people will have more control of government than just voting. Government will take seriously the question of whether the people approve.

I'm assuming in this fiction scenario, government doesn't get to print money or in any other way make phony money.