Monday, October 31, 2011
There can be no doubt now that the Obama White House believes that one important way to improve the economy is for Americans to give less to charity. In the collection of proposals he calls his jobs bill, the president has—for the fourth time in his administration—proposed to limit the value of the charitable tax deduction, cutting it back for those earning more than $250,000 to just 28% of a donation, from 35%. Although Senate Majority Leader Harry Reid dropped that proposal from the Senate version of the jobs bill, it remains in the White House set of recommendations to the deficit-cutting congressional "super committee."
By raising the cost of giving (by $70 for each $1,000 donated), the proposal, if enacted, would almost surely lead to a significant decline in overall charitable giving. ...
A drop in prospective donations is bad enough. Much more worrisome are the assumptions of the latest tax proposal and a White House initiative called the Social Innovation Fund. While the former assumes that the money diverted from charity can be put to better use by government, the latter adds the notion that government funds should themselves be directed to nonprofits, some previously independent of government. The other assumption is that private philanthropy should follow along, matching government dollars.In combination, this amounts to what can be called the Solyndra-ization of philanthropy, in which the government would brand select social-service organizations with the Washington seal of approval, and thus signal that private charitable capital should be directed to the same organizations.