Count me as a supporter of pretty much any tax cut any time. Lower taxes mean higher incentives to grow the economy. Lower taxes also create pressure to cut the size of government by 'starving the beast' of revenues. But true conservatism doesn't just set out to shrink the welfare state; it seeks to fill the gaps left behind with private charity. Shrink the state, grow the private sector -- not just private business but also private help for the poor.
The problem is that the tax reform proposal will drastically change the incentives for private philanthropy. By raising the standard deduction, the tax plan will give tens of millions of Americans the benefits of a charitable deduction whether they give to charity or not. The point of the charitable deduction was to reward people for doing good. I believe that the two main functions of the government are to punish the evil and reward the good. Voluntary almsgiving is the very essence of doing good, and it should be rewarded.
I'm not saying that I'm against raising the standard deduction, like I said, any tax cut is a good one. But I think we should put the charitable deduction 'above the line' which means it gets subtracted before the standard deduction, separately. By doing that, our nation's policy would be telling the roughly 30 million Americans who are about to lose the reward for charitable contributions that giving to the needy is important to the public good.
And it’s not just a matter of giving to the materially needy. Churches, synagogues, and para-church ministries that preach the gospel and teach the moral code are necessary to the public good. They get tax deductions from the government because their work eases the burden of government. Teaching people to respect God cuts crime. Instilling a moral code can prevent social problems like fatherlessness. Spiritual renewal can help prevent, or otherwise help people recover from, addictions. In the age of opioid addiction running rampant, spiritual solutions are needed. Faith-based intuitions and the solutions they offer save the government far more in expenditures to deal with social problems than it costs government in lost revenues.
The left has been telling a lie about the right for a long time: it claims that we do not care about the poor. They measure compassion by the size of the government budget dedicated to pretending to solve a problem. We answer by saying that we care about the poor at least as much as the left claims to, and we show it by giving the needy the very best we can offer, the private help. Let's not prove them right by weakening the non-profit sector. Let's not be half conservatives who cut the welfare state but who don't build the private alternative.
As for the matter that true generosity means giving to the poor whether the gift is rewarded by the tax code or not, that is certainly true. But this is not just about the giver, but also about the receiver. Incentives matter, and that means that rewarding people for doing good means they will do more good. If that weren’t true, there would be no point to rewards. Generous people will give whether the deduction is there for them or not. But the spiritually and physically needy will get more of what they need if our policy reinforces the morality of alms rather than undercuts it.