Taxes, Poverty and Charity

Last night I watched "American Idol Gives Back" raise over $30 million (according to reporter Anna David) for charity, half going to charity recipients in the United States. Certainly an impressive effort on the part of the producers of the show and generous on the part of the donors.

This morning I read two short reports in the paper, both related in some way to taxes. One stated that the Florida House had voted to "overhaul KidCare, the health insurance program for low-income children, so that the children of state employees and immigrants are covered." The other article reported that the Federal government had on Tuesday April 24 of this year broken the record for collection of personal income taxes set on April 25 of 2006. Last year's record was $36.4 billion. This Tuesday's take was (wait for it) $48.7 billion. This is a 33.7% increase, in one year.

Just three obervations I would like to make.

One, that one could extrapolate from this enormous jump in one-day revenue that the economy is doing well and tax revenues have surged because of the tax cuts implemented in the last seven years. The cuts should be increased and made permanent.

Two, taxes should be cut even more until government revenue declines, because the more money the government collects, the more ways it finds to spend it. The KidCare report is symptomatic of this inclination. All of a sudden, a program designed to help low-income children is now going to subsidize government employees.

And three, taxes should really be cut even more because they are a highly inefficient way to help the poor. Tax revenues support huge and growing bureaucracies that consume much of the inflow before remitting some to the needy. Private charity efforts are alive and well in this country (as demonstrated by "AI Gives Back"), and much more efficient than government. Lower taxes would enable people to donate more to charity, and at a philosophical level, donations are voluntary whereas tax collections, redistributed to beneficiaries selected by the government, are coercive charity or perhaps just robbery.