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Thursday, January 10, 2013

Religious Giving as a Guide to the Principles of Good Taxation

Robert Wolf (Wisconsin - La Crosse), Religious Giving as a Guide to the Principles of Good Taxation, 13 J. Accounting, Ethics & Pub. Pol'y, 1 (2012):

The principles of good taxation are a set of guiding values necessary for any responsible state to consider in constructing their tax policy. The principles are derived from various philosophical and economic discussions including but not limited to the role of the state, ownership of natural resources, the optimal size of the state, the emphasis on individual versus community rights, and what is reasonable. Adam Smith (1776) initiated the discussion on the principles of good taxation including equality, certainty, convenience and economy. Others have expanded and articulated the principles to include reasonable and neutral. Curran (2001), Hamill (2006), and others have considered the principles of good taxation from a religious viewpoint. Along different lines, Croteau (2005) develops the principles of giving for a religious institution. As religious institutions rely on giving in a similar manner that states rely on taxes, it is useful to review the principles of good taxation in comparison to the principles of giving. This research finds strong consistency between the principles of good taxation and the principles of giving. Additionally, the principles of giving make a strong argument for elevating the importance of effective allocation of tax revenues as a principle of tax collections.

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Comments

If I give $1000 to my church then because I get a tax deduction I have really given $650 and the government has given $350 to my church.

Now, most of my fellow parishioners are fairly well off. So why subsidize them?

Further, how has this escaped the religion vs state folks?

Why the hell is this deemed good taxation policy?

Posted by: gregger | Jan 11, 2013 10:17:39 AM

"Why the hell is this deemed good taxation policy?"

I would've thought the justification is that we the people have agreed to permit some portion of our earnings to be directed toward "good causes" in exchange for a tax deduction. And because we're a plural society we've let individuals use their own morals to determine what they views as a "good cause". i.e., Bob doesn't complain that we're efficiently subsidizing the ACLU and Jack doesn't complain we're effectively subsidizing the Institute for Justice.

Given the relative inefficiency of the goverment, I would've thought encouraging this giving increases the amount of public goods we have in society.

Maybe you don't find that all that convincing, but it does seem to be a way of partially democratizing the generation of public goods.

Posted by: Henry | Jan 14, 2013 7:33:15 AM

"I would've thought the justification is that we the people have agreed to permit some portion of our earnings to be directed toward "good causes" in exchange for a tax deduction."

Charity is the act of doing something to benefit another. Period. Charity does not exist when one gets something as as a result of his actions.

Oh how noble! Mr. X gave poor Mr. Y $1000, and yet it only cost Mr. X $650 to do so! It's the power of Jesus!

No, it's the power of a corrupt tax code that has been heavily tweaked by social engineering. Nothing more nothing less. If our overall tax burden was reduced by streamlining the tax code (which would result in a lower tax rate), one's charitable donations wouldn't be conflated with personal benefit - true charity could exist.

In fact, if all of us paid the same percentage of tax on our income, all of our charitable giving would be coming from the same place - personal sacrifice for the benefit of another with no expectation of anything in return (nor would that gift cost anyone more or less to give).

Charity.

Tio

Posted by: TioMoco | Feb 26, 2013 4:29:02 AM