America’s two richest men; Bill Gates and
Now obviously wealthy individuals who give their money to charity in a responsible and intelligent way such as Bill Gates is doing can do a lot of good. Gates is certainly doing a lot of good with his foundation which is funding vital research and vaccines for the poor.
But not all charitable donations can be good or constructive. Under Gates and Buffett’s pledge a billionaire who gave half his fortune to the Memorial Foundation for Holocaust Denial would be doing “good.” Meanwhile a billionaire who invested half his fortune to build factories that put people to work, helped families enter the middle class and grew the economy would not be doing “good.”
Not all “charity” is beneficial to society and many rich people would do far more good for society investing their money in productive businesses. Yet, we as a society reward any charitable donation as “good” no matter how silly or questionable.
The sad thing is that our tax code will actually reward the billionaire who donated the money to the Hitler Foundation because that would be a charity which is not taxed. The factory building billionaire would have to pay taxes or spend a fortune on lawyers and lobbyists to get “tax breaks” from government.
The Gates/Buffett donation challenge may not be good public policy either. Is it a good thing to encourage wide spread tax evasion by our richest citizens at a time of rising government deficits? Governments are laying off teachers and policemen because tax revenues are down yet Gates and Buffett are telling the rich not to pay taxes. That doesn’t sound very patriotic or responsible.
It also sounds a tad hypocritical because both Gates and Buffett are strong advocates of the inheritance tax. Now they’re going out and telling rich people to donate their money to charity which is exempt from the inheritance tax.
It might be more responsible to tell rich people to leave their money in private hands or productive business where it can be taxed. Indeed a good case can be made that a lot of the charitable donations are burdens on government.
In many cases a billionaire or millionaire will donate some sort of building to the community (in other words the government). The rich guy pays for the building but not for its maintenance. In many cities tax money has to be diverted from normal government functions to fund the operation of a structure that is little more than a monument to a wealthy man’s ego.
Perhaps it would be a better public policy to encourage rich people not to make charitable donations. That way the money would stay in the productive economy and the tax base and benefit all of society not just the recipients of “charity.”