Do Tax Deductions Force Other Taxpayers to Foot the Bill?

Government propaganda really does come at us from every angle. My attention was drawn to an ESPN article which is mostly about college and NFL football tactics, but has a section titled “Athletic Donations Should Not Be Tax Deductible”. The author likens donating a tax deductible sum of money to stealing from the taxpayers. His logic goes like this: if Phil Knight gives $68 million to build a Football Center, this will allow him to pay $25 million fewer in taxes, because the gift is deductible. According to the author, Gregg Easterbrook, “To cover Knight’s deduction, average people must be taxed more or the national debt must increase.”

This is what Easterbrook calls the taxpayers footing the bill. But he missed a third option besides average people being taxed more, or the national debt increasing: cutting government expenditures. Is it just taken as a given that we can never reduce the amount of money that the government spends in tax dollars? Easterbrook uses this situation to argue that gifts in athletics should not be tax deductible, apparently believing that the taxes collected from these rich folks will do more good being spent by the government instead of being donated to an athletic cause. Easterbrook laments the fact that these donations go towards sports facilities instead of towards educational endeavors.

And maybe he is right about societies’ unwillingness to spend as much on education as entertainment. But what bothers me about this article is that Easterbrook acts like keeping more of your own money is the same as taking money from the taxpayers. It is not Knight’s job to earn money for the sole purpose of funding the treasury, and deciding to make a move with his money that will keep more if it out of the hands of the government is not “allowing taxpayers to be hit” for the extra money saved. The government decides how much money will be taxed, and how much will be spent, so to put the responsibility for paying enough taxes on the earner is essentially a form of slavery. Easterbrook also incorrectly assumes that whatever the government does with that $25 million will be more beneficial to society than going towards the sports complex.

Knight needs to pay those taxes in order to fund the government, otherwise government must make others pay more, or go into debt. Nope, sorry, the government could be responsible, and not spend more than it takes in. It could craft tax policy that rewards earning, so that people don’t have to think of ways to keep their hard earned money. The government could cut waste, and not run up a $17 trillion debt with year after year of deficit spending. But they do not, and that is the fault of the bad politicians who are irresponsible with money, and the voters who keep reelecting people who systematically rob earners. It is not the fault of people who end up paying fewer in taxes because they made a charitable donation.

The amount of money the government spends each year is not automatically the government’s, it is taken from individuals in taxes depending on how much they earn, and what they do with their money.We need to step back and get away from this statist thinking where the government inherently deserves the fruit of our labor. We need to stop pretending that what the government does with our money is better than what we do with our own money. And we certainly need to reject fuzzy language that allows a journalist to equate paying fewer taxes with robbing the taxpayers.

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