Why I Read Bryan Caplan
I know I often disagree with him. But then there’s stuff like this:
“What’s stopping Warren Buffett from paying more taxes?” is a red herring. The fundamental question is: “Why is government’s share of the voluntary donations market so damn small?” All genuinely charitable donations suffer from the Prisoners’ Dilemma… That’s probably a big part of the reason why charity is only a few percent of GDP. But none of this explains why out of the more $300 billion that Americans give to charity, the American government garners about $3 million. Despite widespread nationalist and statist sentiments, Uncle Sam’s share of the charity market is microscopic – less than .001%. How very odd.
Suppose you start a new charity to provide free haircuts for hippies. You only manage to raise the money to pay for three haircuts a year. The Prisoners’ Dilemma might explain why people aren’t more generous with their money in general. But the Prisoners’ Dilemma doesn’t explain why the other charities raise so much more money than yours. If you ask “Why don’t people give more money to my charity?,” the best answer is that people hold your charity in low esteem. Similarly, if total donations to the U.S. government add up to a few million dollars a year, the best explanation is that people see lots of better ways to spend not just their dollars, but their charitable dollars.
I do wonder, though: Could the U.S. government attract a lot more donations with better marketing? What if the President spent less time raising money for his campaign and more time raising money for the Treasury? What if Congress publicly acknowledge the ten biggest donors in an annual ceremony? I can easily believe that donations to the U.S. government would rise a hundred-fold. But even then, Uncle Sam’s share of national charity would be a mere .1%.
It is exceedingly odd that Americans profess to love their country so much, yet volunteer so little money to their government.