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Shouldering the burden of our neighbours: how exemptions in US tax law affect global and domestic health philanthropy

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  • Meyer, J. Sam

Abstract

Changes in healthcare have historically been driven by an equilibrium between two key institutional actors: the government and the private sector. This symbiotic relationship has offered advantages to both sides, as private foundations supplemented the resources and attention given to areas of public concern that were beyond the government’s reach, and the government reciprocally exempted such charitable giving from taxes, and afforded them the freedom to donate where they see fit. However, as the influence of private foundations only grows, their shift from a focus on domestic issues to global health may inevitably shift this equilibrium away from government benefit. Can upward trends in global health outcomes explain the downward trends in domestic ones, and if so, are tax exemptions on charitable donations responsible for the steep decline in US healthcare? In this paper, I will trace the tax exemptions in charitable giving that span from their roots in the autocratic rulers of 15th Century Europe, through their evolution to the democratic governments of today. I will analyze the public health effects of expanding tax-deductible status to organizations engaged in international rather than domestic activities. These tax exemptions are enabled by clause 501(c)(3), a law enforced by the US Internal Revenue Service (IRS). As case studies, I will analyze the Ford Family and Bill Gates, two of today's key actors in global health, who divested from the corporations they founded through their charitable foundations. Despite a glaring decline in US health outcomes, both foundations continue to invest in projects outside the US. In light of current calls for reform, quintessential questions of biopolitics emerge, namely, should one prioritize human life differently within their borders than beyond them? And, should these priorities be different for government versus private, non-state actors?

Suggested Citation

  • Meyer, J. Sam, 2021. "Shouldering the burden of our neighbours: how exemptions in US tax law affect global and domestic health philanthropy," LSE Research Online Documents on Economics 120028, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:120028
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    References listed on IDEAS

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    1. Papanicolas, Irene & Woskie, Liana R. & Jha, Ashish K., 2018. "Health care spending in the United States and other high-income countries," LSE Research Online Documents on Economics 87362, London School of Economics and Political Science, LSE Library.
    2. Duquette, Nicolas J., 2019. "Founders’ Fortunes and Philanthropy: A History of the U.S. Charitable-Contribution Deduction," Business History Review, Cambridge University Press, vol. 93(3), pages 553-584, October.
    3. Harvey, David, 2007. "A Brief History of Neoliberalism," OUP Catalogue, Oxford University Press, number 9780199283279.
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    More about this item

    Keywords

    health policy; philanthropy; tax law; politics; global health; US;
    All these keywords.

    JEL classification:

    • K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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