I'm just brainstorming here...this idea just popped into my head a couple hours ago, so it's probably not completely thought-out. Maybe you folks can tell me the flaws with this plan (or if you like it).
Conservatives often say that government social programs are not as efficient as private charities. Liberals often counter that while that may be true, there simply aren't enough charitable donations, and we need taxes to compel people to give. I was thinking that maybe there is a way to combine the strengths of both ideas.
Currently, charitable donations in the United States are treated as TAX DEDUCTIBLE. This means that for every $1 you spend on charity, your tax burden is lowered by 10 to 35 cents (depending on your tax bracket). What if instead you received a TAX CREDIT for charitable donations? This would mean that for every $1 you spend on charity, your tax burden would be lowered by $1.
As I see it, most people would choose to give their ENTIRE tax burden to charity rather than to the government. Thus, private charities would be able to more efficiently allocate the resources than government social programs, and people would still be compelled to give back to society. Obviously there would need to be some exceptions for things that the non-profit sector CAN'T handle (e.g. military, police, courts, administrative) that would still need to be taxed.
I'm wondering what you guys think of the idea. Please point out any reasons it wouldn't work and/or ways that it could work even better.