I was miserably unemployed for awhile after college, and took a drudge job at Starbucks to break the monotony. It turned out to be a really fulfilling experience, so I've got a soft spot for them. And now, Taylor Clark at Slate puts some data behind some arguments I've been using for years to defend my corporate BFF:

Soon after declining Starbucks's buyout offer, Hyman received the expected news that the company was opening up next to one of his stores. But instead of panicking, he decided to call his friend Jim Stewart, founder of the Seattle's Best Coffee chain, to find out what really happens when a Starbucks opens nearby. "You're going to love it," Stewart reported. "They'll do all of your marketing for you, and your sales will soar." The prediction came true: Each new Starbucks store created a local buzz, drawing new converts to the latte-drinking fold. When the lines at Starbucks grew beyond the point of reason, these converts started venturing out—and, Look! There was another coffeehouse right next-door! Hyman's new neighbor boosted his sales so much that he decided to turn the tactic around and start targeting Starbucks. "We bought a Chinese restaurant right next to one of their stores and converted it, and by God, it was doing $1 million a year right away," he said.

The article also mentions that, unlike Wal-Mart, they don't compete on price, so they actually have to make people like their products, which is a depressingly rare corporate strategy. But I also think Starbucks was responsible for introducing the whole concept of "good coffee" to the American conscience, thereby expanding the market for indie cafes. Many people think Starbucks coffee is swill, but I bet the only reason it occurs to them to make that judgment is because Starbucks spent the last fifteen years saturating them with the idea that coffee is something they should be picky about. That's the sort of meme you can only propagate if you're a very big company, and indie cafes should be somewhat glad that Starbucks spent the billions of dollars needed to spread that message for them. I always wondered if my San Francisco location gave me a false impression of a robust, diverse cafe economy in America. I mean, if there's going to be a Starbucks backlash anywhere, it's gonna be here. But it sounds like small cafes are doing well anywhere that there's demand for them. I certainly don't think Starbucks is perfect (I hang out in indies usually), and I sympathize with anyone who hates the coffee or the cloying ads, but overall it's a good thing they're in business. (via Daring Fireball)

John Irons and Carl Malamud, at the Center for American Progress, propose a tax credit to promote open-source development:

An open source tax credit is proposed which would allow individuals who develop open source software to receive a tax credit worth 20 percent of their out-of-pocket costs. Corporations and self-employed individuals may already take a deduction for their development expenses for both open source and proprietary commercial software. The open source tax credit provides a similar incentive for individuals who currently have no means to deduct these expenses. Subsidizing open source software development can also be justified on grounds of economic efficiency. Open source software development enhances the ability of other developers to create new products. It also enhances the development and dissemination of knowledge and ideas more broadly. Since the benefits to the broader software development community and the economy as a whole go well beyond the users of an individual software product, a policy that subsidizes open source development would increase economic efficiency.

Although I'm an open-source software (OSS) developer myself, and generally believe that government can and should pull its weight to solve big systemic problems, I have a few issues with this proposal.

Further discussion has led to some interesting questions about policies designed to foster philanthropy:

1. In order to avoid taxes, rich people put a lot of money into personal foundations, which then give grants to non-profits. That sounds nice, because non-profits are supposed to be altruistic by their very nature, but a cursory look at the landscape of tax-free organizations out there reveals a lot of think-tanks and other research or advocacy organizations that are as far away from soup kitchens as you can get. This is not so much a problem with the idea of non-profits as it is with the rules governing what kinds of organizations are tax-free. Unfortunately, the boundary between organizations that are really not-for-profit and those that are political engines in disguise is fuzzy. So, should there be a cap on the tax-deductible amount you can give to a non-profit? You could still give as much as you want, of course -- it just starts being taxed when you go past the tax-deductible limit. This is an interesting example of framing for me. Depending on how I approach the idea, it either repulses or delights me. George's analogy for this is the Necker Cube: you can see both interpretations of the necker cube (either the front face of the cube is on the lower left or it's on the upper right), but you can't see them both at once. In the same way, when I think about the crucial function played by charitable giving in America, I'm horrified at the idea of disincentivizing it, but when I think of rich folks dodging their fair share of taxes, I think a policy like this could restore the balance between the two sectors of society. Can't see it both ways at once. At the bottom, though, I think it's a good idea.
2. The converse observation is that the standard deduction on income tax is somewhere around $5,000 right now. This translates to a floor on tax-deductible donations. Suppose Dick and I make the same amount of money, but I donate $4500 every year to charity and Dick donates nothing. Because the standard deduction is more than the amount I donate, we both deduct the same number from our income when we do our taxes. I don't pay less tax than him until I donate more than $5000 (a substantial chunk of income for most people). I don't think most people are motivated to give to charity because of tax write-offs, but even if they were, they'd be foiled by the current tax law. So, should the standard deduction be eliminated? If it were, the tax tables could be adjusted to account for any upheavals this would cause (i.e. poor people would be paying a lot more in tax, unless rates were lowered to account for the fact that everyone's registering more income). Is it inconsistent to have a floor on tax deductions, but not a ceiling?
3. Should giving-account administrators really be prohibited from restricting the types of organizations to which their members can contribute? In my mind, these accounts should operate no differently than a bank account set up the same way. A bank can't tell you how to spend your money. But suppose Focus on the Family becomes a giving-accounts administrator. Any employee who has an account with them can only give to their pre-approved list of right-wing/religious charities. If the employee wants to donate to another charity, nothing's stopping them from doing it the old-fashioned way. And suppose Wal-Mart decides to use them as their giving accounts provider. Well, shouldn't they have that choice? Should giving accounts administrators be prohibited from using that as an axis of competition? In my mind, giving accounts should operate no different from a bank account set up in a similar fashion. Because employees could donate to any organization they want from their own bank account, they should be able to do it from their giving account, and that restriction should be enforced. So I don't think Wal-Mart should have that choice, because this isn't a question of choice. I don't think left-leaning organizations should restrict their employees' giving account options either. And yet, it's not cut-and-dry at all.

Here's my pitch: Employers frequently withhold more than taxes from paychecks. For instance, when I worked at Starbucks, I could choose to have a few bucks a month taken out post-tax to help other Starbucks employees with financial crises. Right now, I get a pre-tax withholding for transportation reimbursements, which I get back by sending them receipts of my monthly BART ticket purchases. But each of these withholdings is limited to a single non-profit domain: health, transportation, whatever. And most of them are self-centered -- your health savings account just goes to you. In the case of Starbucks, the crisis account only helped Starbucks employees. If you want to contribute your wages to fighting poverty, or to defending civil liberties, saving the environment, building museums, focusing on the family or whatever, you gotta do it yourself. The best way to do this, right now, is to set aside X dollars a month, keep track of how much you donate, and try to acheive as much parity between the two amounts as possible. This would be much easier if you actually had a seperate bank account that held your charity money, but that's hard to do. It's possible to keep track of these things with Quicken or some such, but no one I know has the zeal for accounting that makes this a worthwhile undertaking. So we make willy-nilly donations whenever a worthwhile cause floats into our awareness, and hopefully the sum of those donations adds up to the holistic amount we feel we should be giving, but probably not. So, what if there were a way to withhold X percent of your wages, pre-tax, and put it in an account that you can use as a fund for donating to various non-profits? Let's call them "giving accounts". Rich people do this by creating their own foundations. Why not democratize it by making those kinds of facilities available to Wal-Mart employees, Starbucks baristas, schoolteachers and other mere monetary mortals?