A Welfare State Libertarians and Fiscal Conservatives Can Get Behind

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Christopher Carr

Christopher Carr does stuff and writes about stuff.

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79 Responses

  1. Avatar Citizen says:

    Greed is endothermic not exothermic. If exothermic it would have already redistributed.Report

  2. Avatar Ryan Noonan says:

    Doesn’t the tax deduction for charitable donations already achieve this effect?Report

    • Avatar Christopher Carr says:

      It absolutely does, but there are limitations and unnecessary complexities.

      What I’m talking about here really is: conservative politicians spend a lot of time opposing the welfare state when what they really should be advocating is a welfare state that is based more on voluntary charitable contributions and less on government allocation.Report

    • Avatar Brandon Berg says:

      No. Christopher is suggesting a tax credit for charitable donations, rathen than just a deduction. Under the status quo, if you have a 30% marginal tax rate, then the marginal cost to you of donating $1,000 to charity is $700, because that donation reduces your tax liability by just $300. With a tax credit, the marginal cost to you of donating $1,000 to charity is zero, because it reduces your income tax liability by the full $1,000.Report

      • Avatar Christopher Carr says:

        Exactly. Or at least, I am suggesting a Republican Party that wants to move the welfare state in that direction instead of dismantling it. I think the ideal welfare state would be somewhere in between.Report

  3. Avatar Kimmi says:

    Yes, of course.
    1) most people need coercion to donate.
    2) people, given free will, donate to the people who are best at advertizing.
    People still get gangrene and feet fall off, they just do it quietly under the bridge, while their “cheetos eating” friends get (comparatively) rich.

    Leaves people kinda stranded, if they aren’t good at dealing with others.

    Also, who’s to say who you are doing stuff for, or what favors you are getting???
    Prostitution is the least of what I can envision.Report

  4. Avatar Jaybird says:

    registered and recognized cause

    I see a lot of gaming going on here… this group over here complaining that, oh, inner city murals shouldn’t be a recognized cause and that group over there complaining that the Holy Ghost Manifest Church shouldn’t be recognized… how high/low a bar are we talking to become R&R? The same as becoming a non-profit?Report

    • Avatar Christopher Carr says:

      It would be a fairly low bar I think. That way you could donate to inner-city murals and I could donate to the Holy Ghost Manifest Church. The entire point is to free the system from majority-rules or bureaucratic allocations of funds. Reduce the size of the government while at the same time replacing its function with a more-organic institution.Report

      • Avatar Kimmi says:

        so… you can donate to the church…
        I’m sorry, I see no way that tax dollars, that ought to be spent for the good of everyone, should go towards brainwashing, kidnapping, and/or rape. (it ought to be clear that I do not think that all churches are like this. still…)Report

        • Avatar Christopher Carr says:

          obviously, we’ll continue to prosecute kidnapping and rape under such a system, so I doubt any charitable contributions would go towards that.Report

          • Avatar Kimmi says:

            Because we did such a good job BEFORE your regs went into effect!
            Sorry, it’s still a salient point… I’m not going to link you to Encyclopedia Dramatica (nsfw), but it’s got plenty of info on it…Report

        • Avatar Jaybird says:

          If one wishes to place the bar high enough that churches don’t qualify, and there are reasons to do that, I’d be interested in seeing how the law gets off of the ground.

          Because, I assure you, if The Holy Ghost Manifest Church doesn’t qualify, Inner City Murals will never, ever, see a tax-deductible dime.Report

      • Avatar Glyph says:

        Can we require all r & r causes to publish all their operating expenses and purported goals & accomplishments on the web for easy access (not sure if we already do this for non-profits), and ideally make sure that they allow comments/feedback the same spot, to assist donors in evaluating the efficacy of the causes?Report

  5. Avatar Kimmi says:

    A better question: if we could get this through congress, how much more would the conservatives be willing to donate? (aka if necessary raise taxes, if not necessary defund something else…)Report

  6. Avatar Mike Dwyer says:

    “Give every taxpayer the choice to donate a certain percentage of income or services (say 10%) to a registered and recognized cause.”

    Don’t we already do that?Report

  7. Avatar Ethan Gach says:

    I’m going to bleed blue here and just say that I believe in majoritarian (Republican style) democracy for a reason. At least in the current global and national context, I don’t think this “longtail” approach (where you have little amounts of money being donated to tons and tons of causes) would suffice.

    The whole point of the Federal government, again given the current context, is to deal with problems that individuals and groups are too small to deal with on their own. The U.N. is a superstructure for dealing with inter-national problems (global warming/war/trade).

    Similarly, I see the federal government as a superstructure for dealing with problems that are to big, or to external, to any one person, group, or state to deal with (or even coalitions of these things).

    The kind of free-f0r-all public funding this seems to amount to doesn’t appear, at first blush admittedly, to be all that different from a free market approach.

    Literally going from voting with your vote (on what programs to spend what on) to voting with your dollar (by doing the spending yourself).

    I don’t see how problems that had hitherto remained unsolved by the free market/private sector (space travel, elderly poverty, public health, infrastructure) would be solved simply by *requiring* that all people spend a certain amount of money toward some sort of public end.Report

    • Avatar Brandon Berg says:

      Similarly, I see the federal government as a superstructure for dealing with problems that are to big, or to external, to any one person, group, or state to deal with (or even coalitions of these things).

      Federal welfare programs don’t face this constraint. Things like the military do, but there’s no particular reason there needs to be one central administration cutting all the welfare checks.Report

    • I don’t think they would either. We’d keep government more narrowly focused though (and thereby better) by effectively privatizing (hate that word, btw) much of the welfare state.Report

  8. Avatar KatherineMW says:

    The problem is that not all causes that are valuable and useful are well-known or prominent, and that people don’t have the time, resources and – most particularly – interest to do in-depth analysis of the places they donate to to see if their money is being put to good use. They hear about something that sounds like a good cause and donate to it.

    An obvious example of this comes from charities that let donors decide which part of their operations they want to donate to. After the Haiti earthquake, droves of people donated money specifically for “housing”. Charities had more money than they could actually useful put towards housing. At the same time, other needs – food, water, medical care – went unmet because that’s not what people chose to donate their money towards.

    Then there’s the problem that, in addition to not having huge amounts of information or especially good judgement about all the different things that need funding, people…well…are often not very nice. Do you think that all the people that complain about lazy people living off government welfare and driving Cadillacs are going to choose to donate their money to inner-city schools and single mothers in need? Our gut-level emotions also play in. What’s the proportion of people who would like to donate to harm reduction for drug addicts compared to those who would like to donate to the SPCA to help save cute kittens and puppies?

    Also, 10% is a lot less than the current tax rate, so your proposal really seems to amount to removing the welfare state and replacing it with bits and pieces of private charity that can’t come close to replacing it.

    The core problem with this – which seems mind-blowingly obvious to me – is that you’re leaving the “choice” up to the wrong people. In this “private welfare state”, the amount of funding anything gets is determined by what well-off people want to give money to, not by what people in need actually need. The degree to which such a system already exists in foreign aid is one of the core criticisms that workers and theorists in foreign aid have with the system. A country says, “We want to give $500 million to education in Mozambique!” and Mozambique’s going “Well, we’ve already got a lot of people funding education here, we could really do with some roads…”*

    The way funds are allocated in the welfare system should reflect what is needed, not what people feel like giving money to. And governments have the statistical and analytical resources to be able to determine what needs exist; maybe not optimally, but far better than the average private citizen can do.

    What you really want, if you want to get away from government planning, is a system that is determined by the “demand” of needy people. In foreign aid, there have been some suggestions from neoliberals along these lines (e.g.: have both government and NGO aid groups give out vouchers to people in a developing country, and the people can spend those vouchers on plant seeds for their farms, or on training, or on education for their kids, or on different types of health care). There are good arguments for both pro and con on that idea, but it’s looking in the right direction – at the needs of the beneficiaries, not the preferences of the donors. Any kind of functional “private welfare state” would need to do the same.

    * Illustrative example; not intended to reflect precise circumstances of Mozambique.Report

    • Avatar Kimmi says:

      hmm… that actually sounds kinda cool. creating a market for charitable dollars (kinda like foodstamps, except on a larger (and freer) scale).Report

    • Avatar Roger says:

      Catherine,

      I guess at the extreme your argument makes sense. The idea is not to allow citizens to direct all the welfare enhancing activities, it is to allow them to contribute on the margin. That is, to direct some of their money or time to causes that they strongly believe are under-represented in the current regime (and which they may be uniquely qualified to contribute). In your case, it could be needle programs in the inner city. In another case it could be kitten shelters, or schooling for kids on a reservation.

      The odd thing about your argument is that you seem to imply that people have the same values as those represented by a majority elected official seeking reelection. Even stranger, you seem to imply that our current tax dollars are going to the objectively needy. I am not sure how needy corn agribusiness conglomerates are.

      I believe that your critique implies that need is an objective entity that everyone agrees upon. I disagree.Report

      • Avatar Kimmi says:

        I’d be more supportive if the “uniquely qualified to contribute” was more emphasized…
        Donations in kind are already allowed by tax law (try it with a used car dealer. Smoke flys out of their ears!)Report

      • Avatar Kimmi says:

        I think most people can agree on what “personal need” is.
        1) lack of food/malnutrition
        2) lack of homes/housing
        3) lack of adequate health care
        4) lack of adequate educational facilities

        Perhaps on a larger scale, we cant’ agree, but at least for what “welfare” is intended to do…

        Now, you’ll note, I haven’t said we all agree these are Governmental Business!

        But someone “in need” is fairly easy to find, and get agreement on.Report

      • Avatar KatherineMW says:

        We’re talking about the welfare state. Agricultural subsidies are not part of it (and I entirely agree with you that they should be eliminated).

        There are certain conditions – lack of food, lack of shelter, lack of health care, lack of decent schools to send your children to, inability to afford living in a safe area – that all people can agree qualify as “need”.

        People can donate, “at the margins”, to things they feel are underrepresented in government funding. That’s why you get tax credits for charitable donations. If that’s what you want, the current system already achieves it. The suggestion given above isn’t “at the margins” – it’s to replace the entire welfare system with private charity, so that if too few people care about housing the homeless, well then, too bad for the homeless. It’s a terrible idea.Report

        • Avatar Roger says:

          Katherine,

          Well argued. I agree with the original post’s suggestion on the margin, but agree with you that I would not replace the current system in total. I would introduce additional choice and competition into the current system, but not unlimited choice.Report

    • Avatar NewDealer says:

      All very good points. I should have just signed on here. Especially the drug addicts v. puppies and kittensReport

    • Avatar Brandon Berg says:

      And governments have the statistical and analytical resources to be able to determine what needs exist; maybe not optimally, but far better than the average private citizen can do.

      Government decisions are arguably driven more by the whims of the ignorant masses than private donations would be. Democracy runs on a one-man-one-vote basis, but because income follows a log-normal distribution, the majority of donations would be directed by a small group of high-income individuals, most of whom are significantly better informed than the average voter. Furthermore, they could direct their donations towards filling in the gaps left by the less-informed low-income donors, which would cancel out their errors.Report

      • Avatar Jesse Ewiak says:

        If you assume rich owners of say, 29 Wendy’s franchises or a bunch of car dealerships know better how to help out poor people than somebody with a MA in Social Work who runs a local welfare department.Report

        • Avatar James H. says:

          Is that really such a hard assumption to accept? It’s notable that as the number of social workers in the country has increased, the problems have not decreased.Report

          • Avatar Jesse Ewiak says:

            I don’t know, despite out problems, we’re still a better country back in the 1880’s and 1890’s. Or even the 1950’s. I will accept that ever since too many state governments accepted the neoliberal consensus and cut state funding for social services in comparison to population growth, things haven’t been as good as possible.

            I do still find it amusing that it’s no big deal to accept medical advice from a doctor, financial advice from a stock broker, or advice about a DUI from a lawyer, but the idea we ask advice from people who have spent their life studying poverty instead of a random businessman is anathema.Report

          • Avatar Kimmi says:

            Yes. the German industrialists do not accept such a crazy idea (they’re on record as laughing at Gates’ plans). Neither do the Japanese.Report

        • Avatar Brandon Berg says:

          There would still be social workers, of course. They’d just be working for private charitable organizations rather than for the government.Report

      • Avatar KatherineMW says:

        No, they’re not. Governments may do some dumb things, but they have a lot more information and analysis on hand than even a well-informed wealthy private citizen. They have statistics and reports on levels of homelessness, numbers of people who lack access to health care, the geographic distribution of these people, different programs which seek to address these issues, the relative success of different programs, et cetera. Programs are constantly studied and evaluated. And for the majority of issues, in which the general public isn’t interested in the nitty-gritty details, policy is determined by this analysis and evaluation.

        I prefer to rely on analysis and facts rather than on the assumption that rich people are just smart enough to know what’s right for everybody.Report

        • Avatar Kimmi says:

          Yes. You’ll all kindly note that the markets are highly tied to the Federal Reserve’s announcements. This is because the government knows “everything” and thus provides more useful analysis than private firms.
          Markets price in certainty.Report

        • Avatar Roger says:

          Katherine,

          Just to clarify though, it is not JUST government agencies that can accumulate and communicate this knowledge.

          The odd thing about increasing the marginal impact that taxpayers have on their contributions is that it would make them feel better about their contributions even if it made zero impact on total budgeting. Money may be fungible, but taxpayers would still feel good believing that their check went to their cause. Congress would then step in and fund their priorities from the non directed part.Report

  9. Avatar Roger says:

    In general I like it.

    I would allow (not mandate) pro bono activity to be tax deductible. In addition, I would experiment with small scale tax payer directed funding of government services. For example, allow citizens to direct 5% of their returns to an approved list of causes. They could even be allowed to provide more above their tax liability if they so chose.

    The taxpayer directed funds would increase the favorability of paying taxes, as it would increase the sense of control and allow people to fund their most valued causes. My guess is most liberals would react negatively to this idea, even if it benefited the least advantaged.Report

    • Avatar Kimmi says:

      I actually like the idea of small scale taxpayer directed funding of government services.
      It lets teh government get some hard data on which services are popular.
      And everything can still be funded at old rates, more or less.Report

  10. Avatar Burt Likko says:

    What if I don’t want to donate anything? What if my reason for doing so is “I’m a greedy bastard?” Do I have the ability in this system to opt out and donate nothing?

    If not, then this is only half a loaf to those who object to the welfare state on principle — and it’s the half they care less about. The objection is not where the money goes, it’s where the money comes from.Report

  11. Avatar NewDealer says:

    1. You will start seeing a lot of political and litigation fights over what is a recognized charity. Perhaps Republicans will try to deligitmatize charities like The ACLU, Legal Aid, Human Rights Campaign, Planned Parenthood, Acorn, Arts Charities, etc. Atheist groups will claim that donating to any religious group or charity would violate the Establishment cause.

    2. I think you would have an accountability problem. The issue with the chuggers (those idealistic 20-somethings who constantly stop you on the street for lefty charities) is that a lot of the money raised does not go to the the cause. It goes to overhead and such.

    3. People will game the system. Who will make sure that doctors are really being pro-bono with their ten percent of time? Even if a doctor does diagnosis for free, who will pay for the medicine if needed? Also you will need rules to prevent people from being left high and dry. Say a doctor works 2000 hours a year and makes 200 of these pro-bono. Does a very sick and poor patient get cut off if they have the luck of just getting the last hour but needing 40 more for care?

    4. There is a lot of controversy over pro-bono hours with lawyers especially considering the glut of the legal market right now. A lot of higher-ups in the legal world are suggesting that young lawyers make their mark by taking pro bono cases. However, these young lawyers also have a lot of school debt and still need to eat and pay rent. Who pays for the court fees, the evidence, the discovery, etc? The 10 percent of services can be damning to young professionals during recessions.Report

      • Avatar NewDealer says:

        Maybe but I am doubtful. There will be creative accounting and reasoning but some groups might be nudged/guilt-tripped into being honest.

        Katherine still points out an obvious problem.Report

    • Avatar Kimmi says:

      the chuggers are the scabs. down with nader and his unionbusting.Report

      • Avatar NewDealer says:

        Interestingly, I was not thinking of Nader and his public research group which goes door to door but I guess they were the original chuggers.

        I was thinking of the legions of idealistic 20-somethings who seem to descend on to city streets as soon as the weather gets warm and say “Do you have a moment for the environment?” or a whole bunch of other lefty charities.

        In some ways, the idealistic chuggers perplex and fascinate me. By now it has been well-reported that the groups outsource their fundraising to for-profit companies. The charities only receive X amount of the money raised and it might be less than half. There is a high rate of rejection and turn-over. Most chuggers last a week or less.

        Yet you still see the chuggers out every spring and summer with full-throttle optimism. I would think that the practice proved useless by now and disreputable but I guess not. Perhaps there are just sincerely idealistic people in the world.Report

        • Avatar Murali says:

          I have actually worked for one of these for profit companies which do the fund-raising for charities. The reason that they’re so popular in Singapore and other countries is that they guarantee a high rate of return. They are able to raise more money at lower cost than other methods of fund-raising. From my experience, they take only about a 5-7% of the commission and the manage to raise millions every year.Report

          • Avatar Murali says:

            I meant that they take about 5-7% commission (calculated from finding the fraction of my manager’s income + everyone else’s out of the total donations every month.Report

          • Avatar NewDealer says:

            Hm.

            I wonder who gives. Seriously. Everyone I know just says “No thank you” and moves on. Almost everyone I observe says No thanks and moves on as well but I have seen people engaged in conversation from time to time. So I guess some people might give.Report

            • Avatar Kimmi says:

              The on street charities run on the $100 donations, or on the $10 a month every month. Only need to get a few per day (I think two was the quota). The knock on your doors? Well, I was cute and pathetic and got a lot of “here’s a buck” or “have ten”…Report

        • Avatar Kimmi says:

          Those are nearly ALL fuckign nader’s fucking PIRGs. They shill for anyone, from Save the Children to Sierra Club.

          They are paid workers, most of whom aren’t nearly as enthusiastic as you see.

          I did that job. Got 70% of my take… it’s NOT a good idea, and I refuse to do anything with charities that support this system.Report

  12. Avatar greginak says:

    Katherine nailed all the obvious problems. This kind if system will lead to mis-allocation of resources. Money will go to who had the best begging not the biggest need. Rich areas will have a much better safety net then poor areas. Unpopular or little known parts of the safety net will be under-resourced where those that help THE CHILDREN ( as some people are known to mockingly exclaim) will likely get more than enough. Basing funding on popular appeals will change the focus of a lot of orgs to begging more effectively then on serving their population. I’ll note that the one charity i worked in the use of the word “begging” was a joke among us. We knew that is how we got our money although the people who did the begging used much nicer terms. But when your funding is based on begging you are also very susceptible to bad PR.

    I’m sure some people will be able to figure out where i used to work, but when the priest who founded the large catholic org was accused of doing things adults shouldn’t do with young adults funding went through the basement. The population we served got much less for years based on the bad PR. That didn’t change the need of the kids we served but it made it difficult to get any funding. Need was less important then bad PR.Report

  13. Avatar BlaiseP says:

    Contradiction in terms. What is mandated is not a true choice. Which charities would apply? A 501(c)(3) would lose all relevance. Registered, recognised… this isn’t a choice.

    Trust me, I’ve been around philanthropy all my life, first receiving, then giving it. Do NOT let the government gets its camel nose in the tent of philanthropy, nothing good will ever come of it.

    The current tax code provides plenty of safe havens for charitable deductions already. More are not needed. We probably should shut down some 501(c)(3) corps: there’s almost no financial accountability within them. Directors often take most of the donations and only release a tiny fraction to anyone else, and always to some organisation housed in a building with the director’s name on it.

    The road to Hell is paved with good intentions. Your suggestion is the HOV lane.Report

  14. Avatar Morat20 says:

    Is the purpose of, say, the welfare state to ensure a certain bare minimum standard of living (in other words: Keep the starving fed, the homeless sheltered, and basically keep them from breaking into our homes and taking our stuff out of sheer desperation — or being all unsightly and dying out in public) — or is it to allocate people’s ‘charitable giving’ in the way that maximizes the giver’s own particular priorities?

    Is the purpose of a program to “solve a given problem” or “never to make anyone, ever, pay a penny for something they didn’t want to support”? Those lead to different answers.Report

    • Avatar Tom Van Dyke says:

      I’m w/Morat here. I’m strongly opposed to Uncle Sam having a pocket for each of 1000 expenditures. [A million!] This tax pays for this benefit. Feh.

      Dunno about you all, but the fit always hits the shan here in California, and budget shortfalls always endanger cops, fire, parks and libraries but not civil servants, welfare payments, and shitty performance art.Report

  15. Avatar GordonHide says:

    You should note that in states that have fully functional welfare programs the state spends up to half of GDP. A lot of this is redistributed as actual cash.Report

  16. Avatar Liberty60 says:

    Why is it acceptable to finance food stamps this way, and not for example, the military?Report

  17. Avatar Kazzy says:

    Chris-

    Right off the bat, what stops Rich Guy #1 from offering Rich Guy #2 10% of his services for free and Rich Guy #2 from reciprocating? What guarantees are there that the money actually gets redistributed?Report

  18. Avatar KatherineMW says:

    The more I think about this suggestion, the weirder it gets. Christopher, what do you think the point of a welfare state is? If its point is to reduce the amount of money held by rich people in a way that lets them feel good about themselves, your proposal makes sense from that perspective. From the liberal perspective that the purpose of a welfare state is to actually benefit the less well-off, it makes no sense – the allocation of funding is in no way based on need, or on the effectiveness of a given program.

    It’s like you’re trying to create a market system, but going about it backwards. Here’s an illustration.

    Say you’re a poor person. You need $200 of groceries, including a certain medication, but can’t afford them. If we, as a society, believe it’s wrong to let you starve, or to die because you don’t get your meds, there’s a number of different options:

    1) You’re give $200, you can buy whatever you like with it. If you want to get enough food to last you a month, along with your meds, you can; if you want to spend all or most of it on chips and beer, you can. This is arguably the most ‘libertarian’ option for achieving our goal, and is equivalent to ditching the welfare state, having a progressive tax system, and directly transferring money from the rich to those in need. The up-side is that it gives you the most freedom of choice; the downside – emphasized by people who are focused on results (that you get the food you need) rather than choice – is that you might misuse the money and not be significantly better off.

    2) The government, which is aware of your typical eating habits and of your dietary needs (e.g., if you are diabetic, or gluten-intolerant), buys you a package of groceries (including the medication) worth $200 and drops it off at your door. Due to cost reductions from large-scale purchases, because they’re doing this for a lot of people, they amount of groceries they buy would actually have cost $250 if you’d bought them yourself, so you get more groceries out of it. However, the groceries aren’t exactly what you’d like – peppers were on sale this week, so you’d have gotten some of them rather than the celery, the apples are kind of mealy…the government’s large enough that it can’t address the little details as well as you could if you were shopping for yourself. Still, you have what you need.

    3) Christopher’s proposal. Bill Gates does your shopping for you. Bill Gates does not know that you’re a vegetarian, he knows nothing about your typical shopping patterns, and he doesn’t know about the meds you need. But he knows what food is healthy, and he means well, os he buys you what he thinks is best. But it’s not the food you’d choose to eat, and there’s less total food because he chose to get you the high-quality organic stuff rather cheaper items, and you don’t really like arugula….and oh crap, where are your meds?

    You’re unlikely to get the things you want, even more so than under a government system, because there’s no-one keeping track of what’s in demand. And there’s no guarantee that you’ll get the things you need.Report

    • Avatar Kimmi says:

      And, to top it all off, half the food rots because people are using sliderules to get it to you.

      People have this funny idea that charities are more efficient than government at getting things places.Report