Oct 6, 2011

"Ron Paul's Charity" Critique

Dr. Ron Paul is a Republican representative, 2012 presidential candidate, and strong believer in private charity. That last piece of information may sound out of place, but it aligns with his libertarian-leaning political positions. While most Democrats and Republicans have no intention of cutting government charity, Paul strays from his party and believes that individuals can provide the best aid for those living under unfortunate circumstances. However, a recent article from the Huffington Post, “Ron Paul’s Charity: Libertarian Views Fail Reality Test” by Christina Wilkie (the article is linked at the bottom of the post), states the impossibility of solely relying on private charity to provide for those in need. The real impossibility lies in the ability to know absolutely which form of charity is superior: government, private, or the perfect blend of both.

It is important to understand the libertarian’s belief in charity and how it differs from those who hold other political positions before moving on to the article. Libertarians believe that charity through taxation is not actually charity. A charity is a relationship between a voluntary donor and a voluntary receiver (the receiver technically has to accept the offer being given). Taxation replaces the voluntary role with coercion, that is, the donor becomes forced to give up something that belongs to him/her or face the threat of being sent to prison, fined, or suffering some other punishment. Those outside the libertarian influence find that force is justifiable as the end result is a noble one. The government assumes the role of Robin Hood and takes from the rich and gives to the poor. Please note that those who do believe in government charity also believe, for the most part, that private charity can coexist in society.

Getting back to Wilkie’s article, I would first like to discuss Dr. Leslie Lenkowsky’s statements. First, Lenkowsky should have given the name of the study he was referencing. Personally I would like to see how much Americans gave throughout the years, to which people/organizations they gave, and how charity measures up against tax rates and unemployment. I believe that at least part of this increase is due to technological advances, mainly the internet, having some impact of this statistic. Second, assuming the data is correct, Americans donate more money to charities today despite having higher income tax rates than in 1930 (the increase in tax rate is true according to The Tax Foundation) .1 One way to interpret the data then is to expect a further increase in taxes would lead to an increase in tax revenue and an increase in donation to private charity. It is hard to make an actual conclusion though because this study was not experimentally based, but only represents a correlation. One can look at this information with a more positive view of humanity and determine that people are becoming more generous. In that case maybe people today would give even more to charities if there were fewer and/or lower taxes. This stance also, however, cannot be proved or disproved by the study.

The article goes on to describe Paul’s recent experience with private charity. Kent Snyder, a fundraiser for Paul, had passed away in July from pneumonia. A pre-existing health condition excluded him from receiving health insurance. His lack of insurance resulted in substantial medical bills. Even with Paul and Snyder’s other friends and family donating money they were unable to pay all the expenses.

Cases similar to the one above make government programs such as universal healthcare seem appealing. Libertarianly speaking, there are alternate solutions to this problem. In fact, doing the opposite, that is, removing all government run healthcare programs would save the tax payer money. In return, he would have more money to spend on his own health choices. Government healthcare programs and regulations also have the risk of increasing the cost of private healthcare. Government does not have the same incentives as a private business does. They can charge above market prices because of the monopoly they have over the business. Citizens are forced to buy the government service whether they want/need to or not. Regulations, such as forcing insurance agencies to accept someone despite their current health, can increase the price of healthcare. Other regulations such as not allowing certain drug to be used or restricting the use of atypical medical practices (i.e. non science based treatments) can increase prices on the practice as well as limit the consumer’s medical path choice. Removal of government would allow for more competition among insurance agencies offering the best product at the best price.

Now that I have gone completely off topic, let us return to charity. If all the above happens to fail and the individual cannot find a health insurance plan either because it would be too expensive or no company would cover him, he can opt for charity. Paul says in Wilkie’s article that churches would be able to provide help. Paul’s theory is debunked by General Secretary James Winkler of the United Methodist Church who declares it impossible. However, this is assuming current conditions continue. Under a more libertarian government it may be possible. But it doesn’t have to be churches alone that handle those who need medical help. Clinics and hospitals set up by private charities can be created to support those in need.

You may be asking where we can find the money to invest in these charities. After all, we have already learned that a combined partnership of private charity and revenue raised by government in the form of taxes is still not enough today. Even if the libertarian theory is correct about people donating more with less taxation, would it be enough to offset and exceed the money made through taxation? Wouldn’t it be better to simply raise taxes to pay for this?

To the person who believes we should raise taxes, I would like to know: On whom should the government raise taxes? If your answer is the rich, what defines rich? How much should we raise taxes? Aside from health care, what other programs should the government invest in?

But where else can we get money if we’re not taxed more? My solution: Warren Buffett. Buffett has stated that he wanted to be taxed more. If he wants to give more of his money away, why doesn’t he just do it? Unless there is some crazy law that I do not know about that makes it illegal to give too much there is nothing stopping him. And he is not the only person who believes in giving more. Celebrities such as Seth MacFarlane and Jerry Springer have also stated they wanted to have their taxes increased. Again, why wait until you are forced to give your money? If you want to donate your money, my advice is to donate it. This would add lots to the charity fund and provide many families and individuals with a better chance at increasing their living standard.

“Ron Paul’s Charity: Libertarian Views Fail Reality Test”

1. http://www.taxfoundation.org/files/fed_individual_rate_history_nominal&adjusted-20110909.pdf