Are taxes a giving or a taking? Since individuals who earn less than $9350 ($18,700 for couples) are exempt, taxes might be regarded as a way of sharing one’s good fortune and participating in American self-government. But many resent taxes and call them confiscatory. “If I wanted to give to charity,” they say, “I would donate. If it’s compelled, it’s not charity.”
But how big is the gap between charity and taxes? Our tax law recognizes a link between them. Within limits, a proportion of charitable contributions can be deducted from taxes. Charity and taxes both channel help to others. Psychologists call the sentiment behind this provision “inequity aversion.” That is, we prefer fairness. People understand that excessive disparity in wealth can injure the social fabric. Indeed, patterns in philanthropy, supported by experiments in neurology, indicate that many, not only the wealthy, find pleasure in lessening the hardship of others. Elizabeth Tricomi shows that those having more wealth prefer cash transfers to others. But those with less prefer transfers to themselves. Whatever increases the gap in wealth, they judge as bad.
Whether the transfers are voluntary or compulsory can also make a difference. The neurologist Robert Sapolsky reports that paying when required and giving voluntarily release different levels of dopaminergic energy, which indicates the experience of pleasure (Sapolsky, Behave, 549-50). Similarly, as James Sonne and Don Gash observe, the same regions of the brain are strongly activated in those who would typically favor helping in a broad range of circumstances and muted in those for whom perception of the need to help others is desensitized. If these varied responses can be measured in the same regions of the brain, they occur on a spectrum. We must be careful though. Not all differences in political temperament relate to one another on a single line. When confronted by morally based dilemmas (e.g. to share or not to share), the first reaction in more conservative people occurs in the amygdala, in those of more liberal bent, in the ACC (anterior cingulate cortex). These are different regions of the brain where different processes occur—not a continuum. Sonne and Gash, p. 4a, citing Kanai et al (2011) and Schreiber et al (2013).
Widespread contrasts in linguistic usage also reflect these differences. In French, taxpayers are called contribuables. The linguistic overtones apply equally to contributions and taxes. Taxes, though, are still called “impositions” (impôts). In English, “taxpayer,” which is constructed like the German Steuerzahler, underlines the obligation. The French implies a basis in sharing, participating.
If we call taxpayers “participants,” we change the way we refer to our actions as citizens and accentuate our mutual support. There is a similar range of meanings with reference to the military. One “serves” or one “fights” in the armed forces. And just as American soldiers leave no one behind, so we civilians, as citizens, should leave no one behind. We are ready to fight, to come to the rescue, to feed the hungry and shelter the homeless. Taxpayers also vary in how much they approve what the taxes are spent on: arms, infrastructure, debt reduction, welfare. Even a term like “welfare” carries various connotations. To some it means “entitlement,” to others “safety net.” This difference sharply divides our political parties. In October, 2017, three times as many Democrats as Republicans felt “the government should do more to help the needy, even if it means going deeper into debt.”
What would happen if each “participant” could choose the percentage of his or her taxes devoted to different government activities: defense, law enforcement, infrastructure, environmental protection, welfare, schools, scientific research, national parks and monuments, foreign aid, debt reduction? Could the government function? Or are we better off delegating these budgetary decisions to our representatives whose job is to understand the complex whole and to spend money for the common good? Reality falls short of this ideal but we should not abandon the principle.
As the Center on Budget and Policy Priorities puts it, we must “determine whether the actual public services that government provides are valuable. To the extent that such services are worth paying for, the only way to do so is ultimately with tax revenue.” Conservatives express caution on this subject. J. D. Foster of the U. S. Chamber of Commerce warns we should price that support accurately so that expenditures do not outrun revenues. If we incur too much debt, eventually we may lose the ability to respond as we wish to urgent or long-term needs. Although politicians can be self-serving or corrupted by outside enticements, the principle still holds.
Because we each have different perspectives, setting priorities can be difficult. The Business Round Table, a group of leading CEOs, proposes a “partnership” between private enterprise with its access to capital, government with its scale and ability to fund long-term projects that are not initially profitable, and nonprofit organizations for their ability to identify needs. Among non-profits, I would specify universities (public and private) for their ability to pursue leads wherever they go and draw evidence-based conclusions. If this balance seems utopian, we are a free people, and the means we use to resolve these differences are political. (“Political” is a good word. Political life is an attribute of freedom. Where there is no freedom, there is no politics. I’ll take politics over despotism, plutocracy, or theocracy any time!)
In examining the difference between charity and taxes, it’s vital to note that not all charitable contributions are the same. When donations are very large, they are not un-democratic, but supra-democratic. Some foundations, think-tanks or research projects have agendas determined by their donors independent of the democratic process. Government grants, by contrast, are voted by Congress or by commissions set up by our representatives. The democratic origins of government funding contrasts with the independent, individual character of private philanthropy. I would not wish to do away with either, but the possibility of abuse at either extreme should be noted. There is great variation in the degree to which they benefit the citizenry or the world at large.
The purview of our representatives in Congress is extremely broad. Not all politicians and not all their constituents rank the competing budgetary needs the same way, but there are certain priorities. A democratic nation must compel what is required for the defense of self-government. The government should neither disproportionately appropriate private wealth nor stifle individual charity. But we must also distinguish charitable donations from funds that distort democratic deliberation, whether in legislation or elections. If the majority rules and we have elected representatives who deliberate for the common good (not the short-term benefit of their largest backers), then paying taxes is contributing to the general welfare on a scale not possible through individuals donating to charities. To the extent that the representatives are truly representative, the grounds for complaint and the gap between charity and taxation diminish. Charity and taxes fit within a system of caring simultaneously for ourselves and others.