When Elon Musk’s SpaceX had a successful rocket launch and landing earlier this month, I couldn’t help but laugh at the fact that there are some liberals who undoubtedly believe the government can spend half his income better than he can.
Whether liberals want to admit it or not, they can’t spend other people’s money better than they can. Honestly, what could be more inefficient than spending other people’s money on other people? Even on the issue of charity, the government fails at providing services well relative to what happens voluntarily in the private sector.
According to one estimate from Michael Tanner of the Cato Institute, 70 cents of every dollar set aside for entitlements doesn’t wind up in the pockets of the poor, while that figure is only 18 percent in private charity. So here’s the good news: the rich donate to charity…. a lot. To quote from The Chronicle of Philanthropy:
The 400 taxpayers with the highest incomes in 2013 reported giving an average of $32.8 million to charity. That’s the second highest average in two decades of data provided by the IRS, behind only 2012.
Together, that group of taxpayers donated more than $12 billion to charity, or about 6 percent of the charitable-contribution deductions claimed by all taxpayers who filed itemized returns that year. Twenty years ago, the top 400 were only responsible for a little more than 1 percent of all charitable deductions.
The IRS provides data on the top taxpayers as measured by adjusted gross income. With more than 147 million filers in the United States, the top 400 account for just 0.0003 percent of filers.
So 0.0003 percent of the filers account for 6 percent of all the charitable donations – not bad. Here’s how the trends look over the years:
And that’s just the folks on the Forbes 400 – the high scores of life. Liberals may not like the wealthy, but we need them more than they’d like to admit.
[Note: This post was authored by The Analytical Economist]