Policy Thought in Support of the 99%

The focus of the self-termed 99% (or at least the 1% on the streets that say they represent the rest of us) has been income inequality, and there is little doubt that income inequalities have grown over the last few decades.  However, the remedies put forth by some, when they do offer up remedies, are usually focused on traditional taxation: tax the rich and give to the poor - it seems our prescriptions to problems haven't much changed from the days of Robin Hood.

There are other options which are seldom if ever discussed.  One thought that comes to mind is specific to charitable donations.  Every year, particularly around this time of year, billions of dollars of private charitable donations are provided: often to the those in the lower and mid-lower rungs of the 99%.  Individuals alone contribute to over $200B every year in charitable giving, often matched by corporate contributions.

Our federal government provides a healthy deduction on many kinds of charitable giving, but some research shows that we as a society would get a bigger bang for our buck if the subsidy were a match (similar to the above stated corporate match).  And in fact, even a modest match might encourage private citizens, often those wealthy enough to do so, to give more.

So, instead of a deduction, and perhaps as a political solution to get around arguments of class warfare etc., the federal government could instead encourage the private market to ramp up what they already do every year.  The government could honor, with all the full force and faith that our government can provide, a match on every dollar of contribution made to certain charities that benefit the poor or down-trodden.  This helps the poor like a tax cut would, albeit through a charity organization; it helps the rich by increasing satisfaction to a cause they already celebrate; it helps government by partially deflecting arguments of class warfare - after all the government is simply mirroring the actions of the private market and the 'revenue' isn't coming from increasing taxes on the rich.

The revenue could at least partially come from eliminating the need for a charitable deduction (money that ordinarily would go back in the rich guy's pocket) and replacing 100% that program with a matching program (where the money would go to the poor guy's pocket - but a poor guy of the rich guy's choosing!).  Personally, I'd be in favor of putting new dollars into this kind of a project for at least a time, since there is no sign at this point that government spending is causing any serious inflation - though I understand that might be political suicide.

There could be issues politically with setting up a federal matching program, not the least of which would be deciding what charities could be supported in this manner.  There would, for example, need to be a minimum threshold by which the private citizenry would have to contribute to a particular cause for the match to kick-in.  IE., if one crazy nut donates to the 'poor satanist's society' or some such thing, the government would not match that obviously.  But, I suspect since the government already has a list of 501c3 non-profits that many corporation feel comfortable in allowing their employees to associate with, this picking and choosing may not be too difficult.

All this is not to suggest that I disagree that certain persons should be paying their fair share of taxes (and they aren't).  But it is a suggestion given our political reality and given the pressing immediate need for a solution.

UPDATE: further research shows that this kind of idea is already on the table.  Must admit, I haven't heard much about it though.  Also, the match discussed in the article seems rather week.  I'd suggest a much more substantial match.  It appears that I'm not alone in that.  Anyone else?