Cross-posted as usual from A Nice Place To Live.
Boalt Hall suggests a Choose-Your-Charity Tax. This would provide a tax credit of one dollar for each dollar of charitable giving, up to a certain limit, perhaps 10% of one’s incomes. So if a taxpayer grossing $100,000 a year donates $10,000 dollars to the charity of his or her choice, he or she would receive a $10,000 tax credit.
“A decision to vote for the Choose-your-Charity Tax expresses a willingness to endure significant personal sacrifice, but only willingness to do so if others match that willingness.
“And if others match, then the sacrifice is not a drop in the bucket, but a great wave of change – and the taxpayers know that. By matching contributions with over 100 million US taxpayers, it would be possible to solve vast problems. Roughly speaking, supporting such a policy is equivalent to being willing to give $1 when the personal price of giving that dollar is one-hundred-millionth of a dollar. This is the ultimate expansion of the proven “matching” tactic that has already helped increase donations to charities.”
For the average taxpayer, 10% of their income equals roughly $4,000 per year. Even those that agree with Singer’s ideas on charity might struggle to take that $4,000 dollars out of their own pocket and give it to a poor person. But with the Choose-your-Charity Tax, your $4,000 donation is matched by 100 million other American taxpayers, producing $400 billion/year in extra charity.
I don't know as much about economics as most people on this forum do so I don't know any reasons why this wouldn't work. What do you guys think? I hadn't seen this idea discussed anywhere.