The U.S. government ranks near the bottom of tsunami aid givers when national income is measured against assistance. So President Bush, in line with his general view of privatization as panacea, is enlisting private charity to fill the gap.
A parade of corporations has lined up to reap some easy publicity. Citigroup, with profits of $17.85 billion in 2003, will donate $3 million, or an infinitesimal proportion of its profits. The same Citigroup got $4.6 billion in tax breaks in 2001-03. That's billion.
The $350 million pledged by the Bush administration, some of which will be diverted from other relief needs, represents 0.003 percent of our national income. Europe, on average, is spending about triple that.
"The greatest source of America's generosity is not our government," the president intoned as he drafted Bill Clinton and his own dad to pass the tin cup. "It's the good heart of the American people."
Herewith, a different view:
The good heart of the American people can be expressed both by personal charitable giving and by national policy. Bush's version of America's good heart is pass the buck and the responsibility. His version of bipartisanship is that good old Bill Clinton gets to shill for private money that a decent government would be providing.
Bush has blown off the Democrats on everything from enacting a decent Medicare drug program to appointing moderate judges. But when the government's cupboard is bare because so much has gone for tax cuts and for war and Bush gets a little bad press for stinginess, send for a Democrat. And not just any Democrat -- but the Democrats' champion fund-raiser, for everything from Clinton's own election efforts to the Clinton impeachment defense fund and the Clinton library, and now for Asian flood victims.
Give the Karl Rove Award to whoever came up with that gambit. How do you say chutzpah in Texan?
The same corporations giving pitifully inadequate relief donations have spent the past quarter-century successfully lobbying to shred the corporate income tax. Those tax revenues, in turn, could fund decent social outlays to tsunami survivors and a lot of other worthy causes.
In the 1950s, corporate taxes accounted for 28 percent of federal tax collections. Today, they're less than 10 percent.
In 2002 and 2003, the government actually sent large corporations tax rebate checks averaging $63 billion a year. Just last October, the Bush administration got Congress to approve yet another package of corporate tax cuts totaling $210 billion.
Just imagine what kind of relief program could be organized for a tiny fraction of that $210 billion.
A study by Citizens for Tax Justice, using official Treasury data, found that the typical Fortune 500 corporation now avoids taxation on at least half its income and that a third of the largest profitable corporations were able to avoid taxation entirely in at least one of George W. Bush's first three years in office.
In principle, this sharp reduction in corporate taxation makes the economy grow faster and leaves companies with more money to spend on their favorite charity. But we have never surpassed growth rates of the boom years of the two decades after World War II, when tax rates were far higher. A close second was the 1990s, a period when taxes on the well-to-do were moderately increased.
As for charitable giving, even though wealthy corporations and individuals have dramatically increased their share of the national income both before and after taxes, the increase in personal and corporate donations during the past two decades has only slightly exceeded the rate of inflation.
Conversely, there is no evidence that higher tax rates crowd out charitable giving. On the contrary, since charitable donations generate tax deductions, lowering tax rates actually reduces philanthropic contributions. In 2002, the year after Bush's huge tax cut bonanza, donations actually declined by 1 percent.
If Bush were serious about expressing the good-heartedness of Americans, he would organize a large standby government relief program, working with private charities and international agencies. Such a program could match private giving, and be activated whenever disaster struck. He would also dramatically increase funding for such urgent third-world needs as basic sanitation, childhood vaccines, and AIDS prevention and treatment.
Instead, we have facile rhetoric about America's compassion, cheap grace on the part of corporations that have reaped in tax breaks thousands of times what they are giving flood victims, and the most cynical use of bipartisanship to get Bush off the hook.
The good heart of the American people, my eye.
Robert Kuttner is co-editor of The American Prospect. This column first appeared in the Boston Globe.
