Should Egalitarians Expropriate Philanthropists?

Wealthy individuals often voluntarily provide public goods that the poor also consume. Such philanthropy is commonly perceived as legitimizing one’s wealth. Governments routinely exempt the rich from taxation on grounds of their charitable expenditures. We examine the logic of this exemption. We show that, rather than reducing inequality, philanthropy may actually exacerbate absolute inequality, while leaving the change in relative inequality ambiguous. Additionally, philanthropic preferences may increase the effectiveness of policies to redistribute income, instead of weakening them. Consequently, from an egalitarian perspective, the general case for exempting the wealthy from expropriation, on grounds of their public goods contributions, appears dubious.


Issue Date:
2007
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/126999
Total Pages:
30
JEL Codes:
D31; D63; D74; Z13.
Series Statement:
WP
2007-03




 Record created 2017-04-01, last modified 2018-01-22

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