Tuesday, December 18, 2012

Senior Cato Fellow Calls for End to Charitable Tax Deductions

You can't get better proof than this that Cato Shrugged is a house for beltarian micro-managers for the state, who have no idea what a principled fight for liberty is about, or don't care.

Cato senior fellow Daniel Mitchell in WSJ calls for the elimination charitable deductions in part because:
It doesn't do what it promises—that is, to boost charitable giving.
How much more of a government micro-manager can you get? Why should a tax deduction be about directing revenues in any direction?  That is simply government central planning. How about being in favor of tax deductions because they reduce taxes?

But, Mitchell's justification for ending charitable tax deductions, goes from bad to worse:

Finally, ditching the deduction is one of the better options for raising tax revenue here and now. To be clear, I don't want to give more revenue to Washington. That's like putting blood in the water with hungry sharks around. 
But if politicians are going to extract more money from the private sector anyway, reducing or eliminating the deduction is much less damaging to growth than imposing higher marginal tax rates.
Got that? According to Mitchell raising taxes is like putting blood in the water with hungry sharks, but he wants to eliminate the charitable deduction to increase tax revenues! How tortured can an argument get? This type bizarre micro-managing policy position, within the coercive state, points to the real problem with Cato, and similar institutions. They are captured by inside the beltway thinking, and will throw liberty over-board in any direction at any time, if appears to be a good inside the beltway move. They become micro-managers for the state, who are welcomed at any D.C. crony party because they are "reasonable" and understand the need for at least some government coercion. Disgusting.

4 comments:

  1. Great idea, Dan. Why don't we all forego our tax deductible contributions to Stato immediately, does that work for you?

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  2. This is idiocy, especailly for a libertarian think tank. I wonder how they will fare without the charitable tax deduction.

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  3. Not only is Mitchell in favor of raising taxes, he also fails to understand the basic economic principle that tax policy influences human behavior. For instance, if the tax deduction for charitable donations were eliminated, there would be a decrease in charitable donations as a result. Christians who tithe, like Gary North, would likely start tithing on their net income instead of their gross income. Result: less money for the churches, more for the government. And if the mortgage interest deduction were eliminated, people would start taking out smaller mortgages which demand less interest. Some would make larger down payments on homes or simply choose to rent as a result. Mitchell does not understand this. Politicians do not understand this. This is basic economics. Cato has become a mouthpiece for misinformation and state propaganda. Sad and disgusting.

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  4. Arthur Krolman, CFADecember 18, 2012 at 2:31 PM

    Here's how the Hungry Tax Monster's game works to fool the kids generation after generation:
    1. Increase tax rates for everyone
    2. Wait a while
    3. Show how wise and human you are by reducing some taxes for some "deserving" people
    4. Wait a while
    5. Show how just you are by eliminating tax deductions so everyone is treated the same
    6. Rinse and repeat

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