Charitable Deduction as a Tax Loophole: Much “charitable giving” by the super-rich primarily reduces their tax bills (up to 74 cents of every donated dollar would otherwise have been paid in taxes), diverting revenue from public goods toward priorities favored by wealthy donors.

Upcoming AI Wealth Gusher: Massive capital gains from AI-related IPOs (Anthropic, OpenAI, SpaceX, etc.) are expected to trigger an unprecedented wave of tax-deductible “charitable contributions,” potentially exceeding $100 billion annually.

Proposed Reforms: Reich calls for narrowing the definition of deductible charities to those that actually serve the poor, reducing the charitable deduction, raising capital gains taxes on high incomes, and eliminating the stepped-up basis at death rule that allows heirs to avoid capital gains taxes.

I want to start today with a warning about “charitable giving” and end with a primer on wealth inequality. The two are closely related, as I’ll explain. 

We’re on the cusp of the biggest gusher of “charitable giving” in history. Beware.

We tend to think of “charitable giving” as unambiguously good because we equate “charities” with organizations that help the poor and equate “giving” with generosity. But both assumptions are wrong. 

In fact, the “giving” is actually a giant tax loophole that provides the super-rich a means of dramatically cutting their tax bills while quietly funding their own priorities. 

And “charities” under the tax code include elite universities, fancy opera houses, cultural palaces frequented only by the richest of the rich, and nonprofit “think tanks” devoted to right-wing causes.

The problem is that every dollar of “charitable giving” means substantially fewer dollars paid in taxes, because donors deduct their........

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