Tax Day Uncle Sam Charity

by Lil Tuttle

During a lively discussion about our progressive tax system, a progressive friend of mine said he doesn’t resent paying taxes because he views government (dear old Uncle Sam) as his charity – his way of giving to others – similar to the way I view my voluntary personal and church charitable donations. His declaration stopped our conversation cold as I mentally processed this stunning revelation.

On reflection, his perspective goes a long way in understanding why progressives are so quick to support every government giveaway known to man, from unending social welfare subsidies to Obamacare-endorsed insurance company subsidies. They get to feel virtuous about endorsing grand government promises, but they are only directly responsible for paying a tiny portion of the costs.

Yet there is so much wrong with this progressive thinking.

Voluntary vs. Compelled

Personal charity is voluntary. It is a heart responding to visible needs. Early in your working life, the most obvious needs may well be in your own budget. Food, shelter, transportation, and, no doubt, some hefty student loan repayments are unforgiving expenses.

Taxes are compelled … force-of-law compelled! Choose not to “donate” to Uncle Sam, and watch the penalties, interest, and perhaps even criminal charges mount against you.

How Big a Bite?

The amount you give a charity is also a choice you make. No charitable organization I know demands a minimum percentage of your wages. Sure, the traditional church recommends a “tithe,” but that is a mere 10 percent of your income.

Contrast that with Uncle Sam, who demands between 10 and 37.5 percent of your income. You do not get to choose the percentage you are assessed. It is determined for you by 535 federal elected officials you may never meet who really, really like spending other peoples’ money.

Consider the implications on your workweek. If you fall in the 10 percent tax bracket, you will work half of Monday every week for Uncle Sam, and the rest of the workweek for things important to you.

If you’re in the 20 percent tax bracket, however, you work all of every Monday to pay Uncle Sam. If you’re in 37.5 percent tax bracket, you’re working every Monday and most of every Tuesday just for Uncle Sam.

At what point does Uncle Sam’s bite become punishing to you?

Who Gets Your “Charity”?

Then there is the question of who gets your “charity” and how efficiently it is managed. Since you control your personal giving, you can withdraw support any time you find your charity has squandered your gift or spent it inappropriately.

No so with Uncle Sam. He spends trillions of dollars on so many things that it’s impossible to keep track of it all.

According to a news story this week, more than $700 billion is spent annually by the federal government in low-income assistance programs. Low-income assistance seems like a justifiable charitable program worthy of support on both the left and the right.

But are those dollars spent efficiently? Does it reach truly needy people?

Would my progressive friend be surprised to learn, for instance, that “a record 28 million able-bodies adults [are] on Medicaid,” and that the “number has quadrupled since 2000”? Or that “more than 16 million ‘able-bodied adults’ were enrolled in the Supplemental Nutrition Assistance Program, for food stamps”?

Would he still be happy working most of every Tuesday knowing that the wages he earns will go to supporting other people who could provide for themselves?

Most conservatives I know would not. They welcome the executive order signed by President Trump this week “for a government-wide review of welfare programs, with a goal of putting more people back to work.” One of the four objectives is “reducing wasteful spending by consolidating or eliminating federal programs that are duplicative or ineffective.”

I hope the administration succeeds. Benevolence in direct proportion to need is good, but gaming the system is not.

Joy vs. Resentment

Personal charitable giving holds a genuine positive emotional value for givers – it just feels good to do good. I suspect this positive emotion is missing in progressives who hold the Uncle-Sam-as-charity viewpoint.

Last year, my progressive friend accepted a great new career offer in a high tax state. He and his wife sold their home for a profit (and likely a taxable capital gain). Months later, they continue searching for a replacement home in a region with seriously inflated home values and a bruising seller’s market.

Their budget is going to take a big hit this year. So is their tax liability.

My progressive friend will probably lose some of his charitable feeling toward Uncle Sam as he writes out those tax checks this month. He may even feel a little resentful, whether he is willing to admit it or not.