Thursday, November 10, 2011

How to improve charitable givings

Your humble question:  What do you consider to be the best way to get people to become more involved in the community?  What do you think needs to be done to get people to donate more of their time and money to help those in need?  

My humble answer:  I'm going to get a little complicated here, yet bare with me.  

Statistics show that in the 1980s charitable givings increased by the greatest margin in U.S. history.  The reason for this was, I believe, is because the top marginal tax rate was cut from about 70 percent to about 20 percent.  Plus regulations were slashed.  People had more money left over in their paychecks when their bills were paid, and this resulted in more money available to donate.

I believe that one of the best ways to increase charitable givings is to allow people to keep more of the money they earn.  This would entail cutting back on government regulations that cut into the profits of companies (small and large) and provide them with more leeway to either hire more workers or provide better benefits and pay.

I believe that this would also improve the value of the dollar.  When someone earns a dollar and 50 cents goes to taxes, that leaves only 50 cents left to pay the bills.  After the bills are paid, that might leave that person or company with only 20 cents to spend in the marketplace.  

In this way, while a dollar might have bought a loaf of bread in 1980, it would only purchase a quarter of a loaf of bread in 2011.  This is referred to as a reduction in the value of the dollar.  So instead of a buck buying one loaf of bread, it takes four bucks to purchase a loaf of bread.

What this means is that the dollar travels less.  It purchases less goods and services.  With a dollar that went further, this would allow people with more money to save and invest in such things as charities.  So, by improving the value of the dollar, charitable givings would increase.  

This whole process starts by cutting back on entitlement programs, cutting taxes, and freeing companies and individuals from all the regulations that act as a disincentive to do anything.

This post was written as part of NHBPM – 30 health posts in 30 days:

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