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Should Egalitarians Expropriate Philanthropists?

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  • Dasgupta, Indraneel

    (Indian Statistical Institute)

  • Kanbur, Ravi

    (Cornell University)

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.

Suggested Citation

  • Dasgupta, Indraneel & Kanbur, Ravi, 2008. "Should Egalitarians Expropriate Philanthropists?," IZA Discussion Papers 3317, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp3317
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    Cited by:

    1. Dasgupta Indraneel, 2011. "Mother or Child? Intra-household Redistribution under Gender-Asymmetric Altruism," Journal of Globalization and Development, De Gruyter, vol. 2(1), pages 1-27, August.
    2. Indraneel Dasgupta, 2007. "Women or Children? Intra-household redistribution under gender-asymmetric altruism," Discussion Papers 07/10, University of Nottingham, CREDIT.
    3. Dasgupta, Indraneel & Kanbur, Ravi, 2007. "Community and class antagonism," Journal of Public Economics, Elsevier, vol. 91(9), pages 1816-1842, September.
    4. Atkinson, A.B., 2009. "Giving overseas and public policy," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 647-653, June.

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    More about this item

    Keywords

    public goods; inequality; egalitarianism; distribution; community; philanthropy;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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