Tocqueville or Austerity? Health Care and the Social Compact

Aboard the Arbella in 1630, John Winthrop composed “A Modell of Christian Charity,” outlining a social compact by which the Puritan settlers in the New World might “be all knit more nearly together in the Bond of brotherly affection.” Almost four centuries later, America’s democratic society still rests on a tacit social compact enjoining us to seek to balance and maximize individual liberty, personal responsibility, and the public good. These essays by Robert Atkinson and William Dennis invite us to reconsider the function of government and the impact of modern tax policy on our long-lived social commitment to justice and mercy.

Atkinson and Dennis both take a narrow, but very important, focus on the role of tax policy on philanthropy. They reach the same conclusion: each would eliminate tax subsidization of philanthropy through exemptions (and probably through deductions), even perhaps the tax subsidization of all “nonprofit” organizations. Yet they differ greatly in their rationales for this conclusion and in their positive suggestions for how to better realize the American social compact. In place of the current system of tax subsidization of charity, Atkinson proposes a more progressive tax system that increases taxation and government management to provide the “public good.” Dennis promotes a more market-based approach to both philanthropy and the identification and funding of the “public good.” Both conclusions have noble and virtuous grounding, yet each author raises, but does not answer, questions that lie at the very heart of the social compact.

The “academic” questions the authors present include whether to end tax subsidization of Tocquevillean philanthropy and whether to continue government protection of family-funded perpetuities (such as those established by Carnegie, Ford, and Rockefeller in the early 20th century or those of Gates, Buffet, Broad, Soros, and Koch today). These questions can and should be evaluated through the volumes of more than 100 years of tax data and the history of a charitable tradition in Christian cultures extending over two millennia. Perhaps looking at the historical record can help shape a serious, much-needed, and more broadly political debate on the role of government in realizing the social compact. Politics and social influence prevent strictly data-driven conclusions, but volumes of data are available to assess the comparative efficiency of private and public expenditures required by the social compact, and the historical record should inform our reflections on the present recommendations to eliminate federal subsidies for charitable activities.

I would like to explore the questions raised by Atkinson and Dennis by examining in detail health care provision in the United States.

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