Why High Income Earners Should Pay A Charity Levy

A levy on high income earners could actually make them happier.

What you need to know
  • A charity levy would help close the gap between rich and poor
  • It could improve the donor's mental health and happiness
  • Choosing which charity is fundamental to experiencing the benefits

Being made to give money to charity would help balance social inequalities.

David Griggs and Liam Smith from Monash University have published a paper suggesting that making charity donation compulsory for high income earners closes financial gaps in society.

Choosing the charity is vital to feeling good about the donation. Image: Getty Images

Co-author of the study Director of BehaviourWorks Australia Liam Smith told ten daily that there are many benefits to donating to charity -- even if you are required to do so by law. A vital element of such a scheme is that the person gets to choose which charity their money would go to.

"If you choose the charity I think that's fundamental because you will choose something that probably has some personal meaning to you," Smith told ten daily.

Giving Improves Happiness And Health

According to the paper, giving is contagious, it evokes gratitude, promotes co-operation and social connection, and is also good for your health and happiness.

In terms of happiness, choosing to give to charity can positively change the way people view themselves as they come to consider themselves someone who gives and is community minded.

There's also evidence that suggests giving to others improves mental health.

"It gives people another cause or another reason ... to be and even another focus and we all know that what we do outside of our work lives can often be really important in our own identity and our mental health."

Another advantage includes taking control of where personal income is going allows people to feel empowered and less disillusioned with government spending that they might not agree with.

Choosing where your money goes is empowering. Image: Getty Images
How would high income earners like paying another levy?

Smith told ten daily that the idea was derived from the Abbott Government's Budget Repair Levy. This was a levy imposed on people that earned more than $180,000 each year and was payable between July 1, 2014 and June 30, 2017.

"We didn't see or hear a lot of opposition to it ... and we didn't hear a lot of opposition from the rich either. I think some people didn't like it but there was popular support surrounding it."

The proposed charity levy would work to achieve Sustainable Development goal 10 -- to reduce inequality within and among countries. Smith said that it's not supposed to make the richer poorer and the poor richer, but simply works to bring higher and lower ends of society closer together.