Should Egalitarians Expropriate Philanthropists?

18 Pages Posted: 23 May 2008

See all articles by Indraneel Dasgupta

Indraneel Dasgupta

Durham University - Department of Economics and Finance; IZA Institute of Labor Economics

Ravi Kanbur

Cornell University; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: June 2007

Abstract

Wealthy individuals often voluntarily provide public goods that the poor also consume. Such philanthropy is perceived as legitimizing one's wealth. Governments routinely exempt the rich from taxation on grounds of their charitable expenditure. We examine the normative logic of this exemption. We show that, rather than reducing it, philanthropy may aggravate absolute inequality in welfare achievement, while leaving the change in relative inequality ambiguous. Additionally, philanthropic preferences may increase the effectiveness of policies to redistribute income, instead of weakening them. Consequently, the general normative case for exempting the wealthy from expropriation, on grounds of their public goods contributions, appears dubious.

Keywords: Community, Distribution, Egalitarianism, Inequality, Philanthropy, Public goods

JEL Classification: D31, D63, D74, Z13

Suggested Citation

Dasgupta, Indraneel and Kanbur, Ravi, Should Egalitarians Expropriate Philanthropists? (June 2007). , Vol. , pp. -, 2007. Available at SSRN: https://ssrn.com/abstract=1136687

Indraneel Dasgupta (Contact Author)

Durham University - Department of Economics and Finance ( email )

Durham, DH1 3HY
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Ravi Kanbur

Cornell University ( email )

301-J Warren Hall
Ithaca, NY 14853
United States
607-255-7966 (Phone)
607-255-9984 (Fax)

HOME PAGE: http://www.kanbur.dyson.cornell.edu

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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