As our president might say, yes we can. The federal government is currently running an enormous deficit, sufficiently large that it threatens the long-term viability of our country. Thus, it will be necessary at some point to raise taxes. Any tax increase has undesirable effects, including this one, but that’s tough. We’ll need to raise taxes and whining about it won’t accomplish anything.
That’s a different story, though. Obama is specifically targeting charitable donations with this. It’s not just that higher taxes mean people have less to give. It’s that the giving is being taxed more.
I’d like to see numbers on what removing the automatic charitable status and tax exemptions for religious organizations would do to revenues. Much would still be covered under other charitable definitions, but if this would raise as much as this proposal, I’d prefer that. It also has the added side benefit of bringing the law more into line with the constitution.
I’ve worked with dozens upon dozens of non-profit organizations. ALL of them are manned primarily by paid employees, *especially *the ones relieving the workload of public services. If this is the direction of your argument, you have already lost.
I don’t understand your argument. In the government’s eyes, there is little difference between St. Anthony’s Church versus the local Elk’s Lodge versus the United Way. Why would singling out St. Anthony’s Church be “more in line with the constitution”?
Some charities are efficient and some are inefficient. Local homeless shelters that use volunteer to hand out money and collect food from food drives are no doubt pretty efficient. Colleges, museums, churches, those guys who call and claim to be collecting money for the P.A.L., etc., are not necessarily as efficient as the local homeless shelter, but are still just as eligible for tax-deductible giving as the shelter. I have no doubt that there are charities more efficient and less efficient than a similar government agency. So what?
Obviously, it’s not a textbook definition of an earmark. However, by directing your money to your charity of choice, you are increasing my tax burden in some small way. You are earmarking small amount of money that would have gone into the federal, state, and local coffers to a project of your choice.
Now, the people have elected people who decided that charitible giving should be tax-deductible. That’s fine. Now, they have elected people who still think that, but there should be exemptions for people with incomes over a certain amount. That’s also fine. Hey, democracy in action!
You can pull heartstrings all day long with stories of the local homeless shelter, but I bet that’s not where the majority of charitible giving goes to. You give money to Harvard, with their multi-billion dollar endowment, and you get the same tax deduction.
Anyway, the OP asked for a moral justification of the Obama tax proposal, and I offered one. If you want to debate the efficiency of some charities vs. others vs. the government, that seems like a different thread.
I think you’re misreading the article. Other than the fact that people with higher incomes are taxed at a higher rate, the contributions themselves are not being levied a specific tax - they’re just not 100% eligible for deduction.
I have no problem with Monty paying more taxes. He should.
And I sure hope Monty feels better about donating to charity. Because if you think that the primary reason why people donate to charity is to gain tax benefits, then you’re making an argument that middle class and poorer people have less incentive to donate, since they gain less of a tax benefit.
JXJohns,
Is it your position then that private individuals donating to charities of their choice is the most effective means of funding services for the public good?
It is an aside, but remember too that charitable giving is a large umbrella, including PETA, groups that fight against vaccines, religious institution dues and building funds of all sorts, Christian missionaries, Zionist groups, other monies that go abroad, along with your local homeless shelter. Some you may think are good uses of money and some not. Some clearly are not. As for how efficiently charities use your donations, well some are not so efficient; government may be a better bet in many cases. The benchmark is for charities to shoot for under 40% of their received money for fundraising and administration and the rest for program expenses - which of course also have administration expenses themselves.
And if he does think that, he’s going to be sorely mistaken by the numbers. My Chronicle of Philanthropy membership has expired, so I can’t search or link to the relevant article, but lower income individuals are giving larger percentages of their income than the wealthy (which isn’t that hard to believe).
Here’s some more information:
http://news-service.stanford.edu/news/2008/january16/googlesr-011608.html
Here’s an interesting quote (let’s see if I can use the quote tags right):
My argument is that if St Anthony’s does nothing else but be a religious organization, it is tax exempt. Which is, in my view, a violation of the Establishment Clause. I have no issue with the charitable work done by St. Anthony’s being considered tax exempt, but the religious aspect, no.
Please tell me you’re not serious.
Even if we were to accept your characterization of people’s motives in giving to charity, your scenario is still a pretty severe caricature. A great many charities are non-religious in nature, for example. Moreover, even if every single charity in America were religious in nature, it still would not justifying monkeying around with the tax deductions simply because you personally disagree with their particular doctrinal stances.
“A moral justification”? That’s not the description I would have used.
How are the actions of St. Anthony’s as “just a religious organization” any different that those of the Elk’s Lodge? And why would singling out St. Anthony’s be anything BUT a violation of the Establishment Clause?
:dubious: That’s the exact opposite to what I am saying. I’m saying that when someone chooses to donate money to charity, they’re effectively paying 100% without direct compensation instead of just 35% without direct compensation, and for that reason, forcing them to effectively pay 135% without compensation doesn’t make sense unless the 35% does enough good to outweigh the reduced donations.
My position is that while there are efficient and non efficient charities, there are also equally efficient and non efficient .gov entities who also serve to provide for those in need. In my experience, which is worth exactly squat here, I have found that I can make an immediate, and efficient, impact upon my community needs through my own donation of time and money. This change of policy reeks of the .gov telling me that it can do a better job in solving local concerns which I find boastful at best, and foolhardy at worst.
How many billions have been spent by the feds on the war on poverty, to what end? How many billions have otherwise been spent to local .orgs with similar results? I agree that many “charities” aren’t. Instead of changing the tax structure of charitable giving, how about the Feds take a stricter stance on what makes a charity instead? I suggest we call a spade a spade and recognize that this is just a move to get more money into the federal coffers.
Stan, since you seem to be comparatively new here, or at least newly active in starting GD threads, I’ll just mention that it’s customary for the OP of a GD thread to include a link to a cite with detailed information about the topic s/he wishes to discuss.
This not only helps posters unfamiliar with the topic get up to speed, but provides a reference point for identifying common ground and basic facts about it, and a baseline for checking whether the OP has accurately characterized the facts.
Posting a two-word OP with no link, and then acting exasperated and superior when other posters ask for a cite, doesn’t really seem to serve any purpose except to piss off said other posters.
AFAICT, nobody here so far seems to have considered the justification actually offered for this proposal by the Administration:
In other words, the offered justification is that reducing the tax break for private charitable contributions will provide revenues to be used to improve health care. Now, there are many arguments we can have about whether the proposed health care overhaul is a good idea in practical terms, but I don’t see any particular problem with that proposal on a moral level.
It’s just redirecting some revenues from one philanthropic object (encouraging private charitable giving) to another (improving health care). Yes, it would be nice if we could devote unlimited revenues to both philanthropic objects (not to mention all others), but since revenues aren’t unlimited, we have to make some choices somewhere.
He asked for a moral justification, and I offered three possible ones – one where one churchgoer and taxpayer is offended by another church, one where one taxpayer is offended by a museum (either their censoring policies, or lack thereof), and one where a taxpayer is offended by a university (due to the subject matter of their courses). I’m not sure why you singled out the religious example.
People were up in arms when that federal arts grant was giving money to that photographer (all names escape me), but a deductible charitable gift to that museum really accomplishes the same thing, doesn’t it? Doesn’t it effectively direct tax money to the offending institution?
Back to your religious example, I imagine some people may get upset if a satanic cult got tax exempt status (maybe there are already examples – I don’t know), and would claim that it’s morally indefensible for tax money to go to that cult. Well, I’ve seen similar claims by some fundamentalist Christians about the Mormons, from just about anyone about Scientology, and so on.
If you don’t like my moral justification regarding the church, feel free to ignore it and use the museum or university examples.
Note – I think it’s fine that there are charitable deductions, since it’s right there in the tax code that we’ve all agreed to. And, if that tax code is changed, that’s fine with me too. I was just trying to address the OP’s question.
Exactly. A portion of money given to charities that previously was not taxed is now being taxed.
Before, if I was in the 33% tax bracket, I could give $100 to charities, and that money would not be taxed, Under his proposed plan, if I give $100 to charities, I would pay $5 of tax. (It’s only deductible at the 28% rate). Call it what you will, but its a tax increase on charitable giving.
I’m afraid you’re losing me here. 100/135% of what?
Would Monty Sr. pay more in taxes if he (a) earned more and (b) took a large deduction than someone who (c) earned less (in a different bracket, actually) and (d) took no deduction? Yeah, most likely. But a poorer person not only earns less than Monty Sr., he also gains less of a tax benefit for donating.
While you may wish to compare kind-hearted Monty Sr. to the greedy Monty Jr., and wringing your hands about how poor, right Monty Sr. may may more in taxes than his jerkface son, I’m more concerned about the fairness between the Monties and Jack Janitor. If Jack is happy to donate a good share of his income for a good cause for a relatively modest tax benefit, I don’t see why the Monties need to be convinced to donate by giving them a substantially larger tax benefit (either in absolute or percentage terms).
So let’s ask another moral question: in the scenarios I laid out above, who is the better person: Jack, who donates money for little tax benefit, or Monty, who thinks he needs substantially greater tax benefits before he donates?