Talk about a moronic statement:
Even as he urged against demonizing the business class, Obama made clear that he thinks affluent Americans have not been doing their fair share as he defended his plan to shrink tax deductions for wealthy taxpayers’ charitable contributions and mortgage interest payments.
~~~“If it’s really a charitable contribution, I’m assuming that [smaller tax savings] shouldn’t be a determining factor as to whether you’re giving that $100 to the homeless shelter down the street,” he said. “I think it is a realistic way for us to raise some revenue from people who benefited enormously over the last several years. It’s not going to cripple them; they’ll still be well-to-do. And ultimately, if we’re going to tackle the serious problems that we’ve got, then in some cases those who are more fortunate are going to have to pay a little bit more.”
Huh?
So let me get this straight. In Obama’s economic world if people make less money they will give more?
Yeeeeeah. Lets look at how much people pay attention to their money:
Recent work by Treasury Department economist David Joulfaian (2000), based on a sample of 1992 decedents, exemplifies this line of research. His preferred estimates suggest that a 1-percent increase in the price of a charitable bequest reduces such bequests by 1.7 percent, and a 1-percent increase in aftertax wealth raises charitable bequests by 1.2 percent—that is, he finds that charitable bequests are more sensitive to price than to wealth.
JustOneMinute has the details of a 2005 study, which we really don’t need. It’s friggin common sense:
The authors compile and contrast the results of a vast number of studies looking at the interplay of tax rates and charitable giving. Although people have many motivations for their philanthropy the conclusion of almost all of these studies points in the same direction – on net people give less when it costs them more.
Obama’s plan is raising taxes on those who earn more, which reducing how much they earn, which means they will give less. Especially considering the fact that he plans on raising the cost of donating.
In a nutshell, it’s a bad thing for charities and the charities know it:
Charity groups are still jittery over a proposed tax change they say could cause wealthy donors to give less, despite assurances from President Obama this week that donations are unlikely to go down because of a reduction in the tax deduction for charitable contributions.
While Obama argues that his administration is trying to make sure low-income donors enjoy the same tax benefits for their giving as high-income donors, charities and the organizations that represent them say they are concerned they could end up paying the price for a more equitable tax code.
“To put any block between the donor and the charity at this time, I think, is not helpful,” said Lisa Hillman, board chairwoman for the Association for Healthcare Philanthropy.
Martin Feldstein (read the whole article, it goes into detail on how his conclusion below was reached):
By 2011, the year in which the Obama administration proposes to start the new tax rule, the projected decrease in giving would surpass $7 billion. With the endowments of charitable institutions sharply reduced by the fall in stock prices, this loss of gifts would make an already bad situation worse.
It all boils down to collectivism as described, glowingly I may add, by Conor Clark at The Atlantic:
Decisions about what will make our community better should be made communally — by pooling revenue and making collective decisions about where and how it should be spent.
I guess we could look at it this way tho:
I think making it more expensive to contribute to charities is a Gramscian move which will certainly impact negatively on charities in the U.S. It’s an unfortunate suggestion which I hope is stopped. On the other hand, when I consider how many university professors, ministers and rabbis and other employees of eleemosynary institutions danced to Obama’s tune there is a certain justice in realizing that the institutions which employ them may find it harder to do so and to compensate them as well as they presently do.
Ah…..the irony.
See author page