Friday, January 4, 2013
The Occupy Wall Street, what's-yours-is-mine-sentiment is alive and well, at least judging by the furious reaction to a recent message I sent out on Twitter concerning the tax increase that President Barack Obama just signed into law.
Anticipating that Congress's fiscal-cliff deal might limit charitable deductions, I shifted some of my planned giving from 2013 to 2012. When Congress did pass a phaseout of itemized deductions this week, I tweeted: "I increased donations to charity in 2012. This deal limits my deductions so I, & many others, will likely donate less in 2013." ...
The fact is that when the government reaches into someone's wallet, there is less money left in the wallet to spend or donate as its owner sees fit. When the government raises tax rates and limits deductions, there are consequences—and in this case the government is making the job of private charity even harder. ...
It happens almost every time: Congress tries to target "the rich" but everyone else suffers. That is what I'm afraid will happen thanks to the anti-charity effect of this new law.
If Congress and the president were able to enact real, meaningful tax reform that lowered rates and reduced or eliminated charitable and other deductions, it would be good for the economy and I would support it. And, like countless millions, I would continue to give to charity because it is the right thing to do.
But raising rates and eliminating deductions is the opposite of what we need to make the economy grow and encourage charitable giving. Particularly in a low-growth economy, the new law will likely hurt charities and force more people to rely on the government for assistance—meaning that the government will want to collect even more money as charities suffer.Giving and caring run deep in the American character and help unify a much divided nation. But when the government goes too far in taking, it ends up with more people to give to and care for, because the private sector and charities have less.