Mitt Romney Tax Returns: Why Barack Obama and Progressives Hate Private Charities

Everyone hates taxes, including Mitt Romney. After months of haggling, politicking, and posturing by the progressive left about what he is hiding in his untold riches, Romney finally released his 2011 tax returns last month. So ends that fiasco — cut the cards and pour the bourbon, right?

Wrong. His tax returns are proving to be a Pandora’s Box which the left is all too happy to leave open. But out of all the ink that has been spilled on the issue, one criticism stands out among the pack: Romney’s generosity is a fraud.

Romney is a charitable man. His total donations in 2011 totaled over $4 million dollars, or roughly 30% of his total income. Such kindness may not make him a great man, as some are claiming, but it almost certainly indicates that he is a good man.

Progressives are beside themselves. Many think that his charitable giving is little more than a politically-motivated distortion. Some are even claiming that Romney donated so much money simply because the Mormon Church requires him to do so. Remove the religious requirement, they say, and the money would dry up.              

Other liberals see Romney’s charitable giving as proof that the rich use the tax code’s charitable deduction as a loophole. Some are now calling for the deduction to be eliminated, or at least reduced, a la President Obama’s most recent budget. They argue that without reform, millionaires will continue to hoard their money while depriving the federal government of the tax revenue it is rightfully due.

This argument is easy to disprove. Despite what you read, rich people do not save a single penny by giving to charity. Every dollar they give is a dollar they lose. If they saved the money for themselves and paid taxes on it instead, they would keep sixty-five cents of every dollar. Sixty-five cents is surely better than nothing. The rich thus give money to charity not to avoid taxes, but for some other reason.  This must be why we call it “charity.”                                         

Failing this argument, progressives fall back to a critique of nonprofits and private charity as such. They argue that the federal government can successfully fulfill the function of private institutions. Moreover, it should fulfill that role — even if private charities and nonprofits have to go the way of the dodo.        

The progressive left often looks at charities and nonprofits in the same way that a parent looks upon a small child. The child may do something decently well, but his labors can never be exceptional without more effort and training. If a particular private charity can address inner-city poverty or criminal recidivism in a meaningful way, surely the organized force of government can do it on a larger scale with even more success. Early progressives like John Dewey and Woodrow Wilson alternately called this “organized social action” and the “science of administration,” both of which necessitated a vast expansion of federal power. The rise of the modern bureaucratic state, in all of its concrete-clad, non-partisan glory, directly follows from these early progressive arguments.

Much to progressives’ collective dismay, however, the history of federal programs does not support this glowing view of federal power. Government programs are notoriously inefficient, corrupt, and often damaging to the very issues they seek to fix (welfare, anyone?). But even when confronted with these setbacks, progressives still refuse to concede that private, non-state institutions serve a useful social purpose. 

Only now do we reach the crux of the issue. Progressives distrust private institutions because they often spread ideas that undermine the liberal welfare state. Private charities, schools, and other nonprofits — religious or otherwise — exert influence over the hearts and minds of individuals. Without the watchful eye of the regulatory state, those private organizations might preach a gospel other than liberal party line.                                          

The only way to ensure that private organization do not actively subvert the forward march of progress— which only the state can direct, as all progressives from Woodrow Wilson to Barack Obama have argued — is to control them, replace them, or otherwise intrude into their inner workings.      

The most obvious tactic is attaching regulations to federal funding. Federal money always comes with strings attached. My own alma mater, Hillsdale College, ran afoul of federal regulations in the 1980s.  Rather than abide by a federal mandating that it count students by race, which the college has refused to do since its founding in 1844, Hillsdale severed its reliance on federal money and turned to private money to continue operations.

Not all institutions are so lucky. Most charities and almost all educational institutions, private or otherwise, receive some amount of federal funding. The HHS Mandate has shown Catholics just how dependent their own public services are on taxpayer money. To their credit, they would rather close their doors than compromise their morals. Progressives cheer the prospect of such a mass exodus: it would limit one of the most “retrograde” institutions from affecting public life through the formation of private morals.

Thankfully, private institutions have proven difficult to dislodge from the public square. Most Americans are not yet ready to let the federal government tell their churches who they can ordain or what constitutes a Rotary Club executive board — even if those victories must be balanced against other significant losses.  

The progressive assault on civil society will continue so long as there are institutions that direct people to anything higher than — or maybe just different from — the state. In the meantime, conservatives should remember that “it takes a village” is actually a truth worth defending, precisely because city hall is not the only building in town.