Posted on July 31, 2012 by PM Team
Deficit reduction policies should not target philanthropy
Even where taxes need to be raised, the system should be designed to encourage charitable giving, argues Yale professor, Robert Shiller.
"We need to accompany any tax increases with an affirmation and
a broadening of the tax system's support of philanthropy," says
Robert Shiller.
In an op-ed piece for the New York Times, Robert
Shiller, professor of economics and finance at Yale has argued that
charitable deductions are fundamental to financial capitalism. "We
need to accompany any tax increases with an affirmation and a
broadening of the tax system's support of philanthropy," he
says.
Shiller notes that there is already a system to encourage
philanthropy that includes charitable deductions on donations to
foundations and donor-advised funds. "Unfortunately, much talk
today focuses on just the opposite idea: curtailing the charitable
deduction for high-income people, in order to help close the
federal deficit," he says. "Amid rising concern about inequality,
we should focus on how we can improve our tax code and other rules
to encourage positive feelings of reciprocity in our society. And
we can do it while still giving people incentives to innovate - and
to keep working hard."
The piece draws on Shiller's latest book, Finance and the
Good Society, where he argues that financial institutions
can reduce inequality if they are set up in the right way. In an
interview with his publishers, Princeton University Press, Shiller
suggested that finance is about protecting the fruits of one's
labour. "It's about stewardship and therefore about achieving the
good society," he said. "A properly functioning government and a
properly functioning financial community should consider the
interests of all elements of society."