Almanac: Why is Charitable Activity Tax-Protected? (Think Freedom, Not Finances)

Almanac: Why is Charitable Activity Tax-Protected? (Think Freedom, Not Finances)

Article posted in General on 14 February 2018| comments
audience: National Publication | last updated: 15 February 2018


A very timely section of the Almanac begins the discussion of why charitable tools are tax favored, and it's not what you think.

Periodically, some politician seeking increased government revenues will propose to chop down the tax deduction for charitable contributions. Were this to happen, U.S. charities would lose billions of dollars. We as American citizens, however, stand to lose much more than that if the tax protections long afforded to charitable giving were to be withdrawn.

The charitable deduction protects our freedom to create and operate institutions that make up a civil society separate from government. Electing representatives is not our sole means of expressing ourselves and contributing to national success. As citizens of a free country we also have the right to act directly in the public sphere. The many private organizations that act within our borders—­educating, assisting individuals, influencing culture, addressing social needs—are the ultimate bedrock underlying our democratic system.

The individual deduction for donations to these civic organizations, and the income-tax exemption for charitable operations, are more than just tax rules. They form a vital legal boundary between the state and civil society. They are not subsidies for civil society, but rather fences that keep government from interfering in a sector that is vital to our national freedom.

Income taxes are the contributions we make to the public good indirectly by force of law. Charitable donations are the contributions we make to the public good directly and voluntarily. Direct giving through donations, and indirect giving through taxes, are dual aspects of our right to self-­governance. Altering the charitable deduction would renegotiate the fundamental relationship between citizens and the state, and undermine our ability to shape our own society.


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