"The Donors Are Taking the Place of the State"

A group of 40 American billionaires, led by Bill Gates and Warren Buffett, has publicly vowed to donate at least half of their wealth to philanthropic causes. Gates and Buffett, through their project The Giving Pledge, hope to persuade the 400 richest Americans to join them. If successful, the duo could generate an unprecedented $600 billion for charity (Americans as a whole donate about $300 billion a year). A laudable example of pure altruism, right? German shipping tycoon Peter Krämer thinks not: “You can write donations off in your taxes to a large degree in the USA,” Krämer told Der Spiegel. “So the rich make a choice: Would I rather donate or pay taxes? The donors are taking the place of the state. That’s unacceptable.” [%comments]

Brian S

Wow - that's a pretty cold assessment of what is clearly altruism to a substantial degree. Are they going to get a sizable tax write-off as a result? Absolutely. A tax write-off to the tun of half their fortune? Not even close.


We've seen this movie before, PHILANTROPY = LESS TAXES but with the upside of being seen as a HELPING HAND...its sheer hypocrisy


That's pretty lame. People that are that rich often max out their tax write-off with charity donations anyways.


I find this situation to be an unacceptable failure of national policy. It is our national economy and our tax system that allow this wealth to be accumulated. Then private parties make a decision as to which public projects or causes will be benefited.

The decisions as to how so much wealth should be directed to which public purposes should be made through a democratically responsible process.

Stated differently, if the U.S. had European type maximum tax rates of around 50% and really taxed all income without mesh of deductions, the application of those billions would be decided through democratic processes, not individual whim.


"The donors are taking the place of the state." I don't even know that that means.

Sam T

Phrasing the choice as "donate or pay taxes" is fairly disingenuous. Charitable donations are tax write-offs, not tax credits. They reduce your taxable income, so the only way to pay no taxes is to donate nearly all of your income.

This isn't a simple tax dodge.

Karen Garcia

All those billions to all those alleged charities will give rise to a new breed of opportunistic capitalist - the Charity CEO- whose exorbitant salary will be justified by the huge task of throwing crumbs to the hoi polloi. Democracy replaced by Plutocracy - they decide where the money goes, they get the vote, and only the little people pay the taxes.


Taking the place of government? Lets hope so!

Bill Gates and Warren Buffett have created thousands of jobs and wealth for Americans simply by following their capitalist pursuits. I trust they can handle philanthrophy infinitely better than the US Government.

Jonathan Baird

I'm glad they are kind and compassionate. EShea, I'm glad you can peer into the hearts of these men, unless you're being sarcastic, if so, touche.
I would much rather private institutions get the money than the federal government. Mr. Kramer must be sipping the tater juice a little too much.
Another issue is what creates more wealth, charity or shrewd investment? I think a good argument could be made for shrewd investment, but then there are the micro finance charities which do both. Bottom line: Private foundations should be able to allocate the resources in a much more efficient manner than the government. Give it away Bill and Warren!


So, whose fault is it that the government isn't doing its job and private philanthropy has to step in? The donors? Or the government that isn't funding education or the social safety net at reasonable levels?

Personally, I'd rather live in a place where private philanthropy isn't relied on for basic human needs, but with the broken system we have I'm glad it is there.

Mark K

No matter what amends they try to make, amassing such great fortunes can never be seen as altruism. In our system all profit comes at the exploitation of human labor, the earth or both.


From the German perspective this might be unacceptable, but as the American model is the closest thing that this world has to a Libertarian model of government and for a country that hates government, this is most certainly acceptable. For years, the most wealthy, as well as average individual citizens who believe in the power of a civil society and of community, have donated to local causes for the tax write-off. Citizens are taking care of other citizens and are having their say directly, not through a bureaucratic mechanism that may or may not meet the needs of their community in an appropriate and timely manner. Denmark a number of years back did a study that showed when they decreased taxes, donations to non-profits went up. Social services and the betterment of a community don't always have to come from government. And many times, they're better when they don't.

Seth Asser

Mr. Gates has gone from being one of the most despised people in the world to one of the most respected, deserving of both descriptions. Even if his philanthropy ended today, his foundation will have done as much to ameliorate the scurge of malaria than any other individual institution and nearly as much for immunization preventable diseases and the best is yet to come.

Mr. Obama got his Nobel Peace Prize for his "promise." It's unlikely Mr. (and Ms.) Gates will get one but he is assuredly more deserving if were to be based on accomplishment, not just politics.

Of course, there is also a common, fundamental misunderstanding of the math of tax deductibility by Mr. Kramer. It's not a tax CREDIT, it's a deduction. If all you cared about was your own pocket, you're better off not giving, yet Americans remain among the most charitable of societies. And, Mr. Kramer, unlike Germany, in the USA the government is OF, BY, and FOR the people. God help us if we go back 250 years to when it was separate.

Seth Asser, MD. Lincoln RI



Makes NO sense! We're talking about their WEALTH, not their INCOME. Their income was already taxed.

They are talking about giving away half their WEALTH now. If they cashed it out, they would pay tax, but they are not going to cash out their wealth. The rich don't do that. The tax code already helps them keep their wealth and pass it on or protect it.

This guy is just a cynic who
1) doesn't want to give his money way
2) thinks gov't knows better than the billionaire where to help
3) thinks he's better than them, a big ego, which probably helped him become rich

Why don't journalist challenge with common sense these people that just want to attack anyone who wants to care about others? Is it all soft-ball and no logic in the media now?


Wealthy people use philanthropy as an excuse to promote lesser government and restrictions on them, largely so they can treat their workers badly. That said, I think the government should use heavier estate taxes to encourage greater dispersal of wealth to charities in wills, as Andrew Carnegie suggested in the Gospel of Wealth.


In my book, the state taking the place of individuals is unacceptable. Let charity be done by the people. I applaud their actions.


If I were someone in need of help and Gates offered to either provide me help through the U.S. Government by paying taxes, or to help me through various charities... I'd prefer the charities any day of the week.

There are charities out there with incredible pass-through rates - the percentage of each donated dollar that reaches someone in need can be quite high. I can't imagine anyone saying the same thing about taxes, at least with a straight face.


Altruism? Where did you get that idea from? Nobody even mentioned altruism. There are lots of reasons given in the MSNBC article you linked to.

Also, writing off donations is an EXPLICIT part of tax law. It's not like these billionaires are getting around the law somehow. The law is written to encourage this sort of behavior.


EShea: Would you rather see 600 billion be handled by the fed or private charities? I, for one, see tons of waste in the government I don't see at the Red Cross, for example.

Rosca Zimmerman

I am amazed by the stupid assertion in the comment. You get to write-off your donation from taxes only to the extent that you earn the income. If the rich were earning close to half of their wealth per year then yes the claim makes sense but do they really? I think that some times we are way too cynical for no reason. Lets give the credit where the credit is due.