"A more accurate term would be “private donations coupled with involuntary, tax-financed public subsidies.”
This point was brought home clearly by Prof. Richard Thaler of the University of Chicago in a recent commentary. He questioned the merits of making charitable donations tax-deductible."
And later:
"If charitable giving were not tax-deductible, you would have to sacrifice $10,000 to finance that increase in the charity’s budget. But if charitable donations were tax-deductible, as they are in the United States, and if you faced a marginal combined rate of, say, 45 percent for federal, state and local income taxes, you would need to sacrifice only $5,500 to enhance the charity’s budget by $10,000.
The other $4,500 would come from fellow taxpayers who might not even know your favorite charity or, if they did, might not much like it."
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