The Redhunter

Reducing the Charitable Deduction

First, here are the tax brackets for fy 2009:

_______0 to _$8,350 10%
__$8,350 to _$33,950 15%
_$33,960 to _$82,250 25%
_$82,250 to $171,550 28%
$171,550 to $372,950 33%
$372,950 and above _ 35%

The Chronicle of Philanthropy explains that the amount of charitable giving you can deduct depends on your tax bracket, so that if you're in the 33 or 35% bracket, that's what you can deduct (beyond the "standard deduction," and for up to 30 - 50% of your adjusted gross income). Under Obama's proposal, anyone making over $250,000 would be limited to 28% for all itemized deductions.

As an example, suppose

...a wealthy donor in the top tax bracket who makes a $100,000 gift. The donor currently would save $35,000 in taxes, or 35 percent of the gift. Under President Obama's proposal, that same donor would save only $28,000, or 28 percent -- a difference of $7,000.

For all of you liberals who profess to care so much about the poor, what this means is that wealthy people will give less money to charity. Happy now?

And as you might imagine, charities are up in arms over this.

Politically Correct Giving

Reducing the tax deduction is only part of the story. In addition, Obama and his fellow leftists are looking for ways to regulate how charities spend their money.

Let's look at that report mentioned earlier; Criteria for Philanthropy at Its Best: Benchmarks to Assess and Enhance Grantmaker Impact, issued by the National Committee for Responsive Philanthropy. I read the Executive Summary, and a few of the other documents, and most of it didn't look so bad. This stuck out, though, in Chapter 1, "Values:"

A grantmaker practicing Philanthropy at Its Best serves the public good by contributing to a strong, participatory democracy that engages all communities....

b) Provides at least 25 percent of its grant dollars for advocacy, organizing and
civic engagement to promote equity, opportunity and justice in our society.....

Reading on, there is much talk about "income inequality" which we are told "remains a
significant barrier to improving one's quality of life and data suggest that income inequality has been exacerbated in recent years." I'm not so sure about the data, but I do know that it's not "income inequality" that's the problem. The problem is not that incomes are unequal, but that there are too many people whose income is too low. This is a distinction with a difference.

Also worrisome is that Harvard political philosopher John Rawls is cited approvingly:

In A Theory of Justice, Rawls articulated his now famous and often cited principles of distributive justice. The first principle calls for all people to have "equal rights to the most extensive system of basic civil liberties." The second principle, also called the "distributive justice principle," states that the socio-economic inequalities inherent in the free market system are morally justifiable if they "work to the benefit of the least advantaged" in our society. Rawls sought to ensure justice and fairness, with an emphasis on redistributive justice in the welfare state. Rawls asserted that all wealth in society is made by the cooperation of all the members of society in the context of the arrangements of basic institutions. He stated that there are two types of societies: a capitalist welfare society and a democratic property owning society. The first is concerned with order and will support welfare for the purpose of maintaining order and serving capital. The latter will arrange institutions and norms to support democracy and welfare to secure membership. Capital will be arranged to support democracy and people.

Socialist income redistribution, here we come.

Also sticking out in the NCRP report was this in Chapter 1 as well

Advocacy, community organizing and civic engagement have played essential roles in the development of our society and our democracy...

Digging further, one comes across the term "social justice" many times. Conveniently, they define it for us:

Social justice philanthropy is the practice of making contributions to nonprofit organizations that work for structural change and increase the opportunity of those who are less well off politically, economically and socially.

Their recommendation:

Leading the field, 108 foundations (13.35 percent of our sample) provided at least 50 percent of their grant dollars for the intended benefit of marginalized communities. Also noteworthy, 56 foundations (6.9 percent) provided at least 25 percent of their grant dollars for social justice. These are the benchmarks for Philanthropy at Its Best.

This is scary stuff for those of us who believe in traditional concepts of liberty. Hold on to your wallets, because these people want to use charitable causes to advocate for income redistribution and other leftist political goals.

Much of the rest of the proposals were innocuous, and some of the ideas were actually quite sound.

However, read the rest of the Wall Street Journal article cited above. Ms Riley discusses other leftist groups that advocate leftist goals for charitable institutions, such as The Greenlining Institute and the Council on Foundations. Given how leftist the Obama Administration is proving, it can't be long before they enact at least some of their recommendations into law.

Why They're Doing This

Obama makes his purpose clear in "Jumpstarting the Economy", one of the documents outlining his proposal. Under "Financing health Care Reform" it says

The reserve fund is financed by a combination of rebalancing the tax code so that the wealthiest pay more as well as specific health care savings in three areas: promoting efficiency and accountability, aligning incentives toward quality, and encouraging shared responsibility.

This is straight out class warfare. Obama and his fellow leftists hate large segments of America and are determined to punish them. The blather at the end about "shared responsibility" is a lot of hooey. Their idea is that you are not only responsible for your neighbor in a moral sense but as such must be forced to pay for them as well. It's not a matter of doing the right thing out of a sense of moral obligation; the liberals want to force you to do it their way.

When Obama said to "Joe the Plumber" during the campaign that "I think when you spread the wealth around, it's good for everybody" he wasn't kidding.

Obama and the left have a simple objective; they want total control of how aid to the poor is distributed. They'd like government to do as much as possible, and failing that the want to control what private charities do.