# Can anyone here morally justify Obama's proposed tax on charitable contributions? **URL:** \ **Category:** Great Debates\ **Created:** [March 13, 2009, 7:44am UTC](https://boards.straightdope.com/t/can-anyone-here-morally-justify-obamas-proposed-tax-on-charitable-contributions/489312 "2009-03-13T07:44:00Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![Stan\_Shmenge](https://avatars.discourse-cdn.com/v4/letter/s/94ad74/32.png) [@Stan\_Shmenge](https://boards.straightdope.com/u/Stan_Shmenge)\ **Post date:** [March 13, 2009, 7:44am UTC](https://boards.straightdope.com/t/can-anyone-here-morally-justify-obamas-proposed-tax-on-charitable-contributions/489312/1 "2009-03-13T07:44:00Z")
Just asking. ---
**Author:** ![Mosier](https://avatars.discourse-cdn.com/v4/letter/m/7ea924/32.png) [@Mosier](https://boards.straightdope.com/u/Mosier)\ **Post date:** [March 13, 2009, 7:55am UTC](https://boards.straightdope.com/t/can-anyone-here-morally-justify-obamas-proposed-tax-on-charitable-contributions/489312/2 "2009-03-13T07:55:26Z")
> [@Stan\_Shmenge](#): > > Just asking. If you can provide a link to what he’s proposing I’ll give it a shot. ---
**Author:** ![Stan\_Shmenge](https://avatars.discourse-cdn.com/v4/letter/s/94ad74/32.png) [@Stan\_Shmenge](https://boards.straightdope.com/u/Stan_Shmenge)\ **Post date:** [March 13, 2009, 9:52am UTC](https://boards.straightdope.com/t/can-anyone-here-morally-justify-obamas-proposed-tax-on-charitable-contributions/489312/3 "2009-03-13T09:52:26Z")
Sigh. What sources of news do you follow that you haven’t heard of it? [Cite](http://philanthropy.com/news/updates/index.php?id=7285) ---
**Author:** ![E-Sabbath](https://avatars.discourse-cdn.com/v4/letter/e/e19adc/32.png) [@E-Sabbath](https://boards.straightdope.com/u/E-Sabbath)\ **Post date:** [March 13, 2009, 10:13am UTC](https://boards.straightdope.com/t/can-anyone-here-morally-justify-obamas-proposed-tax-on-charitable-contributions/489312/4 "2009-03-13T10:13:08Z")
Capping the tax break at 28% for a charitable deduction instead of 33% is _not_ taxing charitable contributions. It is a bit interesting. Of personal concern to me, but I don’t really have a huge issue with it. ---
**Author:** ![Harborwolf](https://avatars.discourse-cdn.com/v4/letter/h/c89c15/32.png) [@Harborwolf](https://boards.straightdope.com/u/Harborwolf)\ **Post date:** [March 13, 2009, 10:15am UTC](https://boards.straightdope.com/t/can-anyone-here-morally-justify-obamas-proposed-tax-on-charitable-contributions/489312/5 "2009-03-13T10:15:28Z")
Your title is a bit misleading. From your cite. > [@](#): > > President Obama’s tax proposals — \*\*including a limit on charitable giving deductions that could be taken by America’s wealthiest people \*\*— could cause giving by America’s wealthy to drop by several billion dollars a year, according to estimates released today by the Indiana University Center on Philanthropy. It’s not a tax on charitable contributions. It’s a limit on the amount of charitable contributions you can claim on your taxes. ---
**Author:** ![brazil84](https://avatars.discourse-cdn.com/v4/letter/b/8491ac/32.png) [@brazil84](https://boards.straightdope.com/u/brazil84)\ **Post date:** [March 13, 2009, 10:19am UTC](https://boards.straightdope.com/t/can-anyone-here-morally-justify-obamas-proposed-tax-on-charitable-contributions/489312/6 "2009-03-13T10:19:04Z")
> [@Stan\_Shmenge](#): > > Just asking. It seems to me that the net effect of the proposal would be to transfer wealth from charities to the government. Agreed? ---
**Author:** ![Stan\_Shmenge](https://avatars.discourse-cdn.com/v4/letter/s/94ad74/32.png) [@Stan\_Shmenge](https://boards.straightdope.com/u/Stan_Shmenge)\ **Post date:** [March 13, 2009, 10:24am UTC](https://boards.straightdope.com/t/can-anyone-here-morally-justify-obamas-proposed-tax-on-charitable-contributions/489312/7 "2009-03-13T10:24:14Z")
> [@E-Sabbath](#): > > Capping the tax break at 28% for a charitable deduction instead of 33% is _not_ taxing charitable contributions. It is a bit interesting. Of personal concern to me, but I don’t really have a huge issue with it. Why not increase the break? Personally I think charitable contributions should be deductable at 100%. Of course that would never fly with the unions that represent the public employee union drones that suck up nine out of every ten dollars funneled through the public teat before it ever gets to a needy person. Of course those members can be unified to vote Democratic, whereas the folks on the dole may or may not show up to vote, or even understand where their bread is buttered. ---
**Author:** ![Stan\_Shmenge](https://avatars.discourse-cdn.com/v4/letter/s/94ad74/32.png) [@Stan\_Shmenge](https://boards.straightdope.com/u/Stan_Shmenge)\ **Post date:** [March 13, 2009, 10:26am UTC](https://boards.straightdope.com/t/can-anyone-here-morally-justify-obamas-proposed-tax-on-charitable-contributions/489312/8 "2009-03-13T10:26:21Z")
> [@brazil84](#): > > It seems to me that the net effect of the proposal would be to transfer wealth from charities to the government. Agreed? Yes, so even if it is only an incremental change, the effect is to channel dollars from efficient private charities, largely manned by volunteers, to public employee union members, who consume the majority of the money, and who’s vote can be counted on by a certain political party. 😉 ---
**Author:** ![Stan\_Shmenge](https://avatars.discourse-cdn.com/v4/letter/s/94ad74/32.png) [@Stan\_Shmenge](https://boards.straightdope.com/u/Stan_Shmenge)\ **Post date:** [March 13, 2009, 10:28am UTC](https://boards.straightdope.com/t/can-anyone-here-morally-justify-obamas-proposed-tax-on-charitable-contributions/489312/9 "2009-03-13T10:28:36Z")
> [@Harborwolf](#): > > Your title is a bit misleading. From your cite.It’s not a tax on charitable contributions. It’s a limit on the amount of charitable contributions you can claim on your taxes. Excuse me? Seriously? Is this the best you can do? Your sentence reveals your ignorance. Read it again. ---
**Author:** ![glee](https://avatars.discourse-cdn.com/v4/letter/g/b5a626/32.png) [@glee](https://boards.straightdope.com/u/glee)\ **Post date:** [March 13, 2009, 11:25am UTC](https://boards.straightdope.com/t/can-anyone-here-morally-justify-obamas-proposed-tax-on-charitable-contributions/489312/10 "2009-03-13T11:25:45Z")
> [@Stan\_Shmenge](#): > > Of course that would never fly with the unions that represent the public employee union drones that suck up nine out of every ten dollars funneled through the public teat before it ever gets to a needy person. Of course those members can be unified to vote Democratic, whereas the folks on the dole may or may not show up to vote, or even understand where their bread is buttered. Cite? ---
**Author:** ![Grumman](https://avatars.discourse-cdn.com/v4/letter/g/43a26b/32.png) [@Grumman](https://boards.straightdope.com/u/Grumman)\ **Post date:** [March 13, 2009, 11:53am UTC](https://boards.straightdope.com/t/can-anyone-here-morally-justify-obamas-proposed-tax-on-charitable-contributions/489312/11 "2009-03-13T11:53:29Z")
> [@brazil84](#): > > It seems to me that the net effect of the proposal would be to transfer wealth from charities to the government. Agreed? I’d say the net effect is to transfer wealth from charities to the government _and the donors_, simply because this reduces the incentive to donate that extra 5% of their income. But I agree, it seems designed to help the government, not the people. ---
**Author:** ![Hentor\_the\_Barbarian](https://avatars.discourse-cdn.com/v4/letter/h/8edcca/32.png) [@Hentor\_the\_Barbarian](https://boards.straightdope.com/u/Hentor_the_Barbarian)\ **Post date:** [March 13, 2009, 11:58am UTC](https://boards.straightdope.com/t/can-anyone-here-morally-justify-obamas-proposed-tax-on-charitable-contributions/489312/12 "2009-03-13T11:58:03Z")
> [@Grumman](#): > > But I agree, it seems designed to help the government, not the people. And who is the government, again? All that by, for and of business - how did that go? ---
**Author:** ![DSeid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dseid/32/20194_2.png) [@DSeid](https://boards.straightdope.com/u/DSeid)\ **Post date:** [March 13, 2009, 12:52pm UTC](https://boards.straightdope.com/t/can-anyone-here-morally-justify-obamas-proposed-tax-on-charitable-contributions/489312/13 "2009-03-13T12:52:37Z")
The argument for a cap on the maximal marginal tax rate that the charitable deduction can be [applied to](http://www.cbpp.org/3-3-09bud.htm): > [@](#): > > President Obama’s proposal to limit the tax deduction for charitable contributions would affect only the top 1.2 percent of affluent U.S. households and, despite claims to the contrary, would reduce total charitable contributions by only 1.3 percent… > > … \* And offsetting this decline, the proposal would help finance universal health coverage, which would greatly reduce burdens on the charitable sector to provide uncompensated health care to millions of Americans who lack insurance. > > ``` > * The proposal would be unlikely to hit charities during the recession, because it would not take effect until nearly two years from now — January 2011 — by which time the economy is expected to be recovering. If the economy is still weak at that time, Congress and the President almost certainly will delay implementing the proposal. In fact, under those circumstances, it would be difficult politically for them not to do so. ... > > ``` > > … Finally, the Administration’s budget also proposes to make permanent the estate tax as it stands in 2009, rather than to allow the estate tax to be repealed or shrink further, as would occur under a number of other proposals that have been advanced on Capitol Hill and in political campaigns. The estate tax operates as a powerful incentive for charitable giving. Giving by estates would be significantly higher under the Obama proposal than under competing proposals that would further curtail the tax. > > The projected loss of about 1.3 percent of total charitable contributions from the cap on itemized deductions should thus be weighed against the beneficial effects on the charitable sector of both universal health coverage and maintaining the current estate tax. Overall, the effect of the budget proposals on charities is probably a very small negative at worst — and quite likely a net positive. ---
**Author:** ![Grumman](https://avatars.discourse-cdn.com/v4/letter/g/43a26b/32.png) [@Grumman](https://boards.straightdope.com/u/Grumman)\ **Post date:** [March 13, 2009, 1:26pm UTC](https://boards.straightdope.com/t/can-anyone-here-morally-justify-obamas-proposed-tax-on-charitable-contributions/489312/14 "2009-03-13T13:26:59Z")
> [@Hentor\_the\_Barbarian](#): > > And who is the government, again? An organisation that takes your money by force while claiming to be doing what is best for the people. That doesn’t automatically mean that they’re always telling the truth. How much will the government earn from taxing that extra 5% on charitable giving, relative to how much charities will lose? Given that the absolute best case scenario is for them to be equal, and the worst case is only 35%, is government spending of sufficiently better value to make this worthwhile? ---
**Author:** ![DSeid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dseid/32/20194_2.png) [@DSeid](https://boards.straightdope.com/u/DSeid)\ **Post date:** [March 13, 2009, 1:28pm UTC](https://boards.straightdope.com/t/can-anyone-here-morally-justify-obamas-proposed-tax-on-charitable-contributions/489312/15 "2009-03-13T13:28:59Z")
But I guess you are asking less about how big of an effect there would be from changing the current status quo than about the “morality” of changing that status quo … And I really do not see what you are getting at there. Individuals are under no legal obligation to give to charities … a moral and/or ethical obligation maybe so. If one accepts that such an obligation exists, then it exists whether the individual gets no money back off of taxes or 35% of the given money back off of taxes or only 28% of it. We (collectively by way of our government) want to promote such charitable giving however and do so by making charitable giving tax deductible. This is not a moral obligation but it does serve the public good. We (by way of our government) _have_ an obligation to pay for services that we as a people decide to provide to ourselves collectively. Your contention is that having it count as a deduction against income in the current highest tax margin of 35% is morally superior to having count against income in what was the highest tax marginal under Reagan of 28%? And that the immorality of that offsets the good of paying for what we are spending? Sorry do not see it. There is no immorality here. That said I could easily see other alternative methods of raising taxes as _better_ choices. Such as the one discussed on [538](http://www.fivethirtyeight.com/2009/03/missing-1000000-tax-bracket.html) the other day. I’d want to see the numbers actually run however. ---
**Author:** ![RitterSport](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/rittersport/32/6326_2.png) [@RitterSport](https://boards.straightdope.com/u/RitterSport)\ **Post date:** [March 13, 2009, 1:30pm UTC](https://boards.straightdope.com/t/can-anyone-here-morally-justify-obamas-proposed-tax-on-charitable-contributions/489312/16 "2009-03-13T13:30:19Z")
You want a moral justification? I guess it may go something like this: I’m morally opposed to giving money to [pick a religious group] because I’m a member of [pick another religious group] and I think they are going against [Deity’s] will with their actions (pick one, marrying gays, not marrying gays, allowing abortion, not allowing abortion, for example(s)). Therefore, I am morally opposed to my tax dollars effectively supporting that other religion. Or: I don’t think people be able to avoid paying taxes by giving money to [museum or school] because that [institution] does the following immoral things: [shows profane or offensive art, censors profane or offensive art, teaches bad things like evolution or bad things like creationism, depending on your point of view] The idea behind charitable tax deductions has always been a little odd to me. If you give to charity and deduct it from your taxes, you get to effectively direct tax dollars (the portion that you don’t direct toward to the government) to that charity, without the rest of us taxpayers having a say in that. Talk about your earmarks! ---
**Author:** ![RitterSport](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/rittersport/32/6326_2.png) [@RitterSport](https://boards.straightdope.com/u/RitterSport)\ **Post date:** [March 13, 2009, 1:37pm UTC](https://boards.straightdope.com/t/can-anyone-here-morally-justify-obamas-proposed-tax-on-charitable-contributions/489312/17 "2009-03-13T13:37:28Z")
> [@Stan\_Shmenge](#): > > Yes, so even if it is only an incremental change, the effect is to channel dollars from efficient private charities, largely manned by volunteers, to public employee union members, who consume the majority of the money, and who’s vote can be counted on by a certain political party. 😉 I can’t figure out why you keep bringing unions into this. Some charities are efficient with money they get, some are inefficient. They don’t all have volunteers (schools, museums, national public radio, and so on). So, I guess, then you would be in favor of a higher marginal tax rate for everyone below the charitable giving cap – that would make your bang for the buck of charitable giving even higher! Heck, if the highest marginal tax rate for people making under $100k were 90%, then I could save a ton of money by giving to charities! Go Obama! Raise those marginal rates! More seriously, since he is proposing letting the Bush-era tax rate reductions expire as originally proposed, that could have the effect of boosting charitable giving, right? More reason to do it, the higher the tax rate, especially for people with higher and more disposable incomes. ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [March 13, 2009, 1:46pm UTC](https://boards.straightdope.com/t/can-anyone-here-morally-justify-obamas-proposed-tax-on-charitable-contributions/489312/18 "2009-03-13T13:46:54Z")
Sure, I’ll give a moral defense of limiting tax deductions for the wealthy. Let’s take two people, Jack Janitor and Montgomery Moneybags. Jack makes $40 grand a year, Monty makes $400,000. Both decide to donate to their favorite charity. Jack gives $100, and deducts that from his taxes. Since he pretty much fits into the 15% tax bracket, that means for every $100 he gives, he pays $15 less in Federal taxes. But for every $100 that Monty gives, since he fits into the 35% tax bracket, he saves more than double what Jack does on his taxes for the same size donation. I don’t see a huge problem with saying that Jack and Monty should receive similar tax breaks for charitable contributions. Will limiting the tax savings for charitable contributions affect charities? Probably. That’s why we should also revert to the old estate tax rules, which would not tax Jack one single penny, and also encourage Monty to give money to his favorite causes upon his demise. I will also note that opponents of the “death tax” can be asked the same moral question, that is, since [a reputable source](http://www.cbo.gov/ftpdocs/56xx/doc5650/07-15-CharitableGiving.pdf) estimated that elimination of estate taxes would reduce charitable giving by 12%. If opponents of the estate tax think Obama’s proposal is on shaky ground, then their own views are a moral tsunami. ---
**Author:** ![Grumman](https://avatars.discourse-cdn.com/v4/letter/g/43a26b/32.png) [@Grumman](https://boards.straightdope.com/u/Grumman)\ **Post date:** [March 13, 2009, 2:00pm UTC](https://boards.straightdope.com/t/can-anyone-here-morally-justify-obamas-proposed-tax-on-charitable-contributions/489312/19 "2009-03-13T14:00:19Z")
> [@Ravenman](#): > > Let’s take two people, Jack Janitor and Montgomery Moneybags. Jack makes $40 grand a year, Monty makes $400,000. Both decide to donate to their favorite charity. Jack gives $100, and deducts that from his taxes. Since he pretty much fits into the 15% tax bracket, that means for every $100 he gives, he pays $15 less in Federal taxes. But for every $100 that Monty gives, since he fits into the 35% tax bracket, he saves more than double what Jack does on his taxes for the same size donation. That’s only works because the government is taking more than twice as much of Monty’s money than Jack’s in the first place! Your complaint only makes sense if you feel that Monty gains significant benefit from money he personally has donated to charity. If Monty is earning $400,000 per year and donates $100,000 to charity while his son Montgomery Less Moneybags Jr earns $300,000 but doesn’t donate anything, then both of them have the same pre-tax income, but Monty Sr pays more taxes, paying the government ~$34,000 extra for the privilege of having donated some of his profits to a deserving cause. ---
**Author:** ![JXJohns](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jxjohns/32/469_2.png) [@JXJohns](https://boards.straightdope.com/u/JXJohns)\ **Post date:** [March 13, 2009, 2:02pm UTC](https://boards.straightdope.com/t/can-anyone-here-morally-justify-obamas-proposed-tax-on-charitable-contributions/489312/20 "2009-03-13T14:02:17Z")
> [@RitterSport](#): > > … The idea behind charitable tax deductions has always been a little odd to me. If you give to charity and deduct it from your taxes, you get to effectively direct tax dollars (the portion that you don’t direct toward to the government) to that charity, without the rest of us taxpayers having a say in that. Talk about your earmarks! So the taxpayers have a better plan for the $100 I was going to give to the local homeless shelter? How much of the $100 is my local shelter going to get after it now goes to the Federal bureaucracy, a chunk of it is eaten up for overhead, and then the rest goes into the general fund? It’s not an earmark if it’s your own money you’re giving out willingly. [Next page](https://boards.straightdope.com/t/can-anyone-here-morally-justify-obamas-proposed-tax-on-charitable-contributions/489312.md?page=2)