Friday, March 14, 2014

"Insulting the rich for giving to charity"

The Centre for Independent Studies highlights a wonderful example of statistic abuse and nasty statism:

Insulting the rich for giving to charityidea3

Do the rich give too much money to charity or too little? Both, according to an article in the Sydney Morning Herald this week, 'Freedom & Control Are Why the Rich Are Really Charitable.' Remarkably, the article manages to insult the charitable donations of thousands of Australians not once but twice, and in contradictory ways.

The basis for the article is the Tax Office's data for charitable deductions from 2010-11, data which can be interpreted in a number of different ways. The SMH chose to compare donors in the very top band (those making $1,000,000 or more), who gave away an average of 1.8% of their taxable incomes, and those in the very bottom band (those making $6,000 or less), who gave away an average of 22%.

This is a misleading breakdown for several reasons. Those in the lowest tax band who give to charity may give generously, but very few in that band give at all - only 6.3%, compared with 63.8% of those in the top band. If non-donors were included in the calculations for that bracket, the average would come out to 1.4% of taxable income.

Secondly, a large number of those in the $6,000-or-less band are retirees with significant net worth but little income, who, as Professor Myles McGregor Lowndes explains, 'give away substantial amounts so they don't have to pay income tax.'

Both bands came in higher than the national average for charitable deductions, which was 0.35% of taxable income.

These figures hardly justify the SMH reporter's claim that 'the rich pinch their pennies,' and they definitely do not justify Community Council for Australia CEO David Crosbie's assertion in the article that the poor 'feel a sense of collective ownership of our wellbeing,' while the rich 'tend to be more disconnected from the broader community.'

The second half of the article's one-two punch is even more objectionable. The reporter insinuates that the rich actually give too much money to charity, since those dollars would have otherwise gone to the government in taxes.

'Taxpayers cannot control how public funds are distributed but because charitable donations are voluntary, they let people feel in control of at least part of the tax pie,' the reporter writes. She adds: 'Whether individuals are more effective than the government at redistributing wealth is questionable.'

Instead of referring to 'the tax pie' in the above quote, the reporter might more accurately have referred to 'their own money.' The 'control' to which she gives such a derogatory spin is in fact a perfectly laudable desire to put one's donations where they will do the most good, even if that means less for the tax man. The proper response to such generosity is not 'Too much!' or 'Too little!' but simply 'Thank you.'

Helen Rittelmeyer is a policy analyst at The Centre for Independent Studies.


gravedodger said...

What an insight to the mindset of a typical "grasshopper" analyzing the behavior of "ants".

Allistar said...

Giving your private property to another by entirely voluntary means is compassionate. Being compelled to give your property to a face-less organisation by a threat of force is not and never can be considered compassionate.

It appals me that some people think force is preferable to compassion.