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Michael NordinePutins massive attack on America worked

Jeff BryantFrank Gehrys Guggenheim Museum in Bilbao, Spain(MykReeve)Rich peoples idea of charity: Giving to elite schools and operasThe wealthy arent donating to food shelters. Theyre giving to Yale and fancy theaters for a tax deduction

–SharesxYour message has been sent successfullySend email to:From email:Message content:Check out this article! SendRobert ReichDecember 14, 2013 6:00PM (UTC)

Its charity time, and not just because the holiday season reminds us to be charitable. As the tax year draws to a close, the charitable tax deduction beckons.

Americas wealthy are its largest beneficiaries. According to theCongressional Budget Office, $33 billion of last years $39 billion in total charitable deductions went to the richest 20 percent of Americans, of whom the richest 1 percent reaped the lions share.

The generosity of the super-rich is sometimes proffered as evidence theyre contributing as much to the nations well-being as they did decades ago when they paid a much larger share of their earnings in taxes. Think again.

Undoubtedly, super-rich family foundations, such as the Bill and Melinda Gates Foundation, are doing a lot of good. Wealthy philanthropic giving is on the rise, paralleling the rise in super-rich giving that characterized the late nineteenth century, when magnates (some called them robber barons) like Andrew Carnegie and John D. Rockefeller established philanthropic institutions that survive today.

But a large portion of the charitable deductions now claimed by Americas wealthy are for donations to culture palaces operas, art museums, symphonies, and theaters where they spend their leisure time hobnobbing with other wealthy benefactors.

Another portion is for contributions to the elite prep schools and universities they once attended or want their children to attend. (Such institutions typically give preference in admissions, a kind of affirmative action, to applicants and legacies whose parents have been notably generous.)

Harvard, Yale, Princeton, and the rest of the Ivy League are worthy institutions, to be sure, but theyre not known for educating large numbers of poor young people. (The University of California at Berkeley, where I teach, has more poor students eligible for Pell Grants than the entire Ivy League put together.) And theyre less likely to graduate aspiring social workers and legal defense attorneys than aspiring investment bankers and corporate lawyers.

Im all in favor of supporting fancy museums and elite schools, but face it: These arent really charities as most people understand the term. Theyre often investments in the life-styles the wealthy already enjoy and want their children to have as well. Increasingly, being rich in America means not having to come across anyone whos not.

Theyre also investments in prestige especially if they result in the family name engraved on a new wing of an art museum, symphony hall, or ivied dorm.

Its their business how they donate their money, of course. But not entirely. As with all tax deductions, the government has to match the charitable deduction with additional tax revenues or spending cuts; otherwise, the budget deficit widens.

In economic terms, a tax deduction is exactly the same as government spending. Which means the government will, in effect, hand out $40 billion this year for charity thats going largely to wealthy people who use much of it to enhance their lifestyles.

To put this in perspective, $40 billion is more than the federal government will spend this year on Temporary Assistance for Needy Families (whats left of welfare), school lunches for poor kids, and Head Start, put together.

Which raises the question of what the adjective charitable should mean. I can see why a taxpayers contribution to, say, the Salvation Army should be eligible for a charitable tax deduction. But why, exactly, should a contribution to the Guggenheim Museum or to Harvard Business School?

A while ago, New Yorks Lincoln Center held a fund-raisinggalasupported by the charitable contributions of hedge fund industry leaders, some of whom take home $1 billion a year. I may be missing something but this doesnt strike me as charity, either. Poor New Yorkers rarely attend concerts at Lincoln Center.

What portion of charitable giving actually goes to the poor? The Washington Posts Dylan Matthewslookedinto this, and the best he could come up with was a 2005analysisby Google and Indiana Universitys Center for Philanthropy showing that even under the most generous assumptions only about a third of charitable donations were targeted to helping the poor.

At a time in our nations history when the number of poor Americans continues to rise, when government doesnt have the money to do whats needed, and when Americas very rich are richer than ever, this doesnt seem right.

If Congress ever gets around to revising the tax code, it might consider limiting the charitable deduction to real charities.

Robert B. Reich is Chancellors Professor of Public Policy at the University of California at Berkeley and Senior Fellow at the Blum Center for Developing Economies. He served as Secretary of Labor in the Clinton administration, for which Time Magazine named him one of the ten most effective cabinet secretaries of the twentieth century. He has written 15 books, including the best sellers Aftershock, The Work of Nations, andBeyond Outrage, and, his most recent, The Common Good. He is also a founding editor of the American Prospect magazine, chairman of Common Cause, a member of the American Academy of Arts and Sciences, and co-creator of the award-winning documentary, Inequality For All. Hes also co-creator of the Netflix original documentary Saving Capitalism.

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