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.

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 .