Reading the original article, it seems his argument is basically
If the government raises taxes by $1000, I only pay an extra $1000
But everyone else is forced to pay too, so the total raised is $300,000,000,000 - administration costs—deadweight loss
So it’s as if my donation was matched 300,000,000 times!
But this is an obviously fraudulent argument—it only works if you don’t care about the huge costs being imposed on everyone else. That $299,999,999,000 has to come from other people, and all the additional associated costs. Once you take into account the cost to them, there is no matching, only value destruction.
Owen points out that you could instead hold tax levels constant and think of it as an alternative to government-directed tax spending, which seems like the more interesting half of the idea.
If people select efficient enough charities, the benefits might outweigh the damage of deadweight loss, and value destruction via higher taxes. The thing is, this charity tax doesn’t seem to guarantee donation matching, it just increases the likelihood hat people will donate to something.
Maybe I am being confused by ambiguity, but the situation I imagined was that the government increases income tax between 1% and 10% and that the pool of money generated by this is given back to people who donate as a tax credit. If I donate $1,000 to AMF, I get $1,000 back from the government: but no guarantee that others will donate to AMF.
Reading the original article, it seems his argument is basically
But this is an obviously fraudulent argument—it only works if you don’t care about the huge costs being imposed on everyone else. That $299,999,999,000 has to come from other people, and all the additional associated costs. Once you take into account the cost to them, there is no matching, only value destruction.
Owen points out that you could instead hold tax levels constant and think of it as an alternative to government-directed tax spending, which seems like the more interesting half of the idea.
If people select efficient enough charities, the benefits might outweigh the damage of deadweight loss, and value destruction via higher taxes. The thing is, this charity tax doesn’t seem to guarantee donation matching, it just increases the likelihood hat people will donate to something.
Maybe I am being confused by ambiguity, but the situation I imagined was that the government increases income tax between 1% and 10% and that the pool of money generated by this is given back to people who donate as a tax credit. If I donate $1,000 to AMF, I get $1,000 back from the government: but no guarantee that others will donate to AMF.