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This guy has some good ideas…

Posted by Chance on June 15, 2006

At the Cato site, Arnold Kling lists what he calls a “libertarian approach to poverty.”.

Like any libertarian, he emphasizes the importance of private charity, and its superiority over government services. However, he does propose a concept that allows tax dollars to go directly to charity.

Under our current tax system, donations to charity are a deduction from income. If your tax bracket is 25 percent and you give $1000 to charity, then this reduces your tax bill by $250, so that the donation only costs you $750 after taxes.

My proposal (which I suspect is not original) is that, on top of the current deduction for charitable contributions, we create a large charitable exemption, of, say $20,000. That would mean that you could donate up to $20,000 and have that amount taken off your taxes. Thus, the after-tax cost of your donation would be zero. For people whose annual tax obligation is less than $20,000, the income tax would essentially be optional. You could pay your taxes, or you could give an equivalent amount to charity.

A charitable exemption would have the effect of shifting resources from government to private charities. I believe that would be a net plus for people in need.

This may be a pretty good idea. Essentially, allow people to pay taxes or donate to charity, up to a certain amount.

This idea, however, would not stand up under scrutiny of the pure libertarian, since either way, people are forced to give money. I do like what Kling says though, which is really an essential piece of his article.

I describe myself as a pragmatic libertarian. If I had to give up a little bit of freedom in order to see a meaningful reduction in poverty, I would do so. My problem with government is that I see it doing harm on both counts.

I agree. I feel like such a tradeoff would be worth it, I just fear a slippery slope, as I mentioned in a previous post.

Kling mentions actually mentions that some programs, like the GI Bill, have been helpful, yet its policy towards public schools, have not. He states, however, that government does not seem to learn from which policies work well, and which ones do not. I would like to note however, that the GI Bill is really an extension of the military, which is a libertarian function of government; so any libertarian could justify the GI Bill program.

Kling also tackles the two prevailing theories about the roots of poverty. 1) The class oppression theory, and 2) that something is actually wrong with the poor, such as abuse, addiction, illnesses, etc…

A pretty good article. I’ve never really wanted to abandon the idea of welfare completely, and it seems like this guy doesn’t want to either. I’m not saying I am completely aboard or opposed to his ideas just yet, but they are interesting to ponder.

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