A Falloff In Charitable Contributions?

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Feb 26 2009, 10:01 am by Marc Ambinder

The first battle lines of the FY 2010 budget are hereby drawn; figures as diverse as CNBC's Maria Bartimoro and Majority Leader Steny Hoyer say that any limitation on itemized deductions for taxpayers earning over $200,000 individually will severely limit charitable giving. Hoyer calls it "clearly one of the greatest concerns." Bartiromo worries about the "unintended consequences." But this sounds like a talking point. If wealthy people want to give money, then they should give, regardless of tax benefits. Also: if you're inclined to oppose higher taxes on rich people, wouldn't this be the first way you'd try to sell your opposition to the American people -- by essentially fretting about the huge drop in charitable contributions? My thought experiment is: if tax reform down the line were to gut all deductions, would charitable contributions totally dry up?

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Comments (4)

OGLiberal February 26, 2009 10:22 AM

Spot-on, Marc. If your primary motivation for giving to charity is to get a deduction then it isn't charity, it's a tax-dodge. I'm sure plenty of wealthy folks will continue to give as much as they did before, but maybe this will knock some of them off their pedestals. Charitable giving does not always = sainthood.

Rhoda February 26, 2009 10:27 AM

The facts are very simple. We have a deficit. We have to start laying out the plan to manage these deficits if we want people to finance the debt we currently have and the funds we will be seeking as we seek to stabilize the market.

Rich people can handle it. If you're an individual making $200,000; be blessed. Your government is bailing your country out to try to keep your standard of living; you're paying for this. That is the case. I think most americans will understand and accept this fact.

Maria Bartimoro is especially galling to me: she and that CNBC crew cheered on this chimera of a market and clearly want the government to bail out the investor class (which is why they're against the cheap nationalization idea; it wipes out investors but is good for taxpayers and keeps us with a functioning banking/finance sector) but they don't want to pay for it at all.

At the end of the day; President Obama needs to not make the mistake he made with the stimulus. He needs to sell this baby. He needs to emphasize this is good for all America and only 5% that can afford it are going to be paying. People will cry class warefare; screw them. We cut taxes and went to war and deregulated and didn't pay any attention to domestic policy issues; the world is collapsing around us. I'm not listening to the idiots that took the hammer to the place.

That's JMHO.

unionmaidn February 26, 2009 10:55 AM

Agree with other commenters.

I also think that with the tax changes, we're looking at a facet of the difference between the former administration's way of funding things--e.g., let the private charities do it--and the current one, which is that government is largely responsible for the public good. I should think that among Hoyer et al there would be a measure of relief that Obama plans to use the tax system to provide a more stable revenue stream for projects to help ordinary Americans--I find it more frightening that these projects have become so dependent on charity.

Voice of Fairness March 3, 2009 9:46 AM

At a time when charitable donations are dropping because of the horrendous wealth destruction brought on by terrible economy and stock market which has collapsed, Obama proposes to reduce tax deductions charitable contributions. First, the new government has taken my hard earned dollars and given them to people who made irresponsible home purchases. The simple fact that they cannot make their payments by definition means they are irresponsible (unable to respond in the appropriate fashion). The administration and their spokespeople try to rationalize that decision by saying its in everyone's best interest when in truth there are better ways to do it (the people pay any benefit they get back later)Then, despite the fact that even though 70% of the Americans do not want to bail out the auto industry, the government decides to give my hard earned dollars to the automakers who lost billions last year (among which was 84 million dollars per day) because of their bad business decisions. One such example of the poor decisions is the money paid to autoworkers which include benefits which are grossly out of line with competitors and the obligation to pay their workers for not working because of ridiculous union rules to union workers who refuse to make significant concessions. Then there is the financial institutions... Now the government wants to take my hard earned dollars and decide where my charitable contributions will go. The new regime seems to view themselves as Robinhood with a new twist - they are taking the money that the wealthy are giving to the poor via charitable contributions and effectively saying 'we will know where your charitable contributions should go better than you'. 'Of course, if you want to give more than you can decide' - big of them, pardon the pun. I think we have lost sight of the truth that Robinhood was nothing more than a thief dressed in psuedo-righteous clothing. It's not a "talking point". It's a substantive point - a truth. I will continue to give but shame on Robinhood and all of his supporters.

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