Trickle-Down Charity

Pax Americana, in defense of deductable charitable donations for the arts:

The first [reason] is that deductions are an indirect subsidy to lots of people who aren’t rich, including the middle class, artists, and those that benefit from the research done by universities, which might end up including poor people. The second is that if we eliminate these indirect subsidies (or make them costlier), some of the slack is going to be picked up by demands for direct subsidies, which would be bad for the arts.

The fact that when rich people give to other rich “middle-class” people, a poor person might eventually benefit is a bad reason to support that kind of charitable donation. It relies on the same logic as Bush’s tax cuts: if you want to help the subaltern, give money to the wealthy. There’s a better plan: we could just subsidize the poor directly!

I think the country is ready for trickle-up economics. If the consumptive power of the poor increases, they’ll buy more stuff, sales will rise, rich people will make more money. Everyone wins!

Pax’s second argument is better, but it’s not clear that charitable donation policy couldn’t be tailored in such a way that poor artist infrastructure is supported, while MOCA-type galleries for high end artists are not. But even if this was not the case, and donations to the arts did decline significantly (while the poor bathed in bling), direct subsidy wouldn’t be all that bad, provided we actually did increase the budget of the NEA or some equivalent organization.

As Corey mentions, the NEA now gives institutional grants, so money-distributing could rest in the hands of thousands of organizations, not an all-powerful Art Czar with no appreciation for anything after Impressionism. And, under Democratic administrations, the NEA has shown willingness to fund non-Victorian works (Mapplethorpe being the most obvious example). Moreover, wouldn’t it be more democratic (read: less elitist) to take art funding out of the hands of a cadre of wealthy donors and put into small local galleries/publications/institutions, able to support all kinds of idiosyncratic artists (even poets)?

3 comments to Trickle-Down Charity

  • […] is back and in fine form: I think the country is ready for trickle-up economics. If the consumptive power of the poor […]

  • “It relies on the same logic as Bush’s tax cuts: if you want to help the subaltern, give money to the wealthy.”

    Charitable giving to large public research universities isn’t the same thing as more money for the uber-rich; it’s money for research and education. By “might benefit poor people” I wasn’t thinking just of tuition for middle income and poor families (though that is one of the benefits), but the public good produced by new technologies and new medicals treatments.

    I’m all for “trickle-up economics,” and in fact, the policy is in effect now: the Earned Income Tax Credit. So your and Mike’s wish is granted!

    Also, I’m not sure how a cadre of wealthy donors is undemocratic. They’re free to donate to whoever they want and they don’t preclude smaller donations (i.e. they don’t constitute a donation monopoly, pushing out smaller donors). In many ways, they are the market for art because they’re the ones that care (or they support the institutions that care). If large swaths of the middle class cared and made donations (or purchased art) then we wouldn’t need bigger donors.

    Additionally, these large donors help provide for institutions; for poetry, we could say that MFA programs at American universities (supported through charitable donations) constitute a decentralized form of support for poetry .

  • Donations to research universities are harder to classify based on class interests, and in theory, you’re right, they benefit us all. However, “public goods” are not all created equal. The same diseases do not kill rich and poor with the same frequency; technology needs/desires differ dramatically.

    Fundamentally, the donation subsidy moves public good money out of public control and into the control of wealthy donors. This is suboptimal, as it skews allocation of scarce public good resources– more specifically, it screws the poor something fierce.

    As far as the EITC goes…poor-side economics is not an on/off thing; There’s always room for more income redistribution! Plus the EITC is as nothing compared to the weak sauce that is the capital gains tax.

    In that art is a public good, the same argument applies to such donations. Public allocation, via government, is the way to go. Note that throughout this discussion, we’re not talking about ending giving; wealthy donors will charitize. But let’s reclaim the public part of that donation, and use it according to the interests of the public.

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