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This issue - February 2010 Vol. I, No. 13
Cover of the February 2010 Vol. I, No. 13 issue
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Public Policy
Obama curbs charitable giving
By Robyn Wethington

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The fiscal 2011 budget reveals President Barack Obama’s intent to draw $291 billion over the next decade by reducing tax write-offs from charitable donations, according to an article in The Daily Caller. Reducing tax write-offs imposes a government mandated burden on donating by removing the incentive to give. This specifically affects American philanthropists who make more than $250,000, punishing the country’s most successful citizens. The Obama administration expects this sector to continue giving regardless of this new initiative that cuts into their tax write-offs.

According to the article, Robert Williams, a senior fellow at the Tax Policy Center, “The rule change would make it about 10 percent more expensive for individuals affected to donate to charity.” He estimates this would correspond to “a $10 billion drop in donations out of the $300 billion Americans give annually.”

But Tom Riley, vice president for communications at the Philanthropy Roundtable argues that “this of all times isn’t the time to take actions that would discourage charitable giving. The need for non-profits hasn’t been higher for a generation.”

Charitable giving is essential to helping the poor. The Catholic Church is committed to alleviating poverty and helping those in need. The Republican Party also believes in helping the poor and encourages philanthropy. Democrats, on the other hand, believe government intervention is necessary to promote philanthropy. Democrats want to tax the rich in order to redistribute money to the poor.

Despite the Catholic Church sharing many of the same values on abortion and same-sex marriage as the Republican Party, the majority of Catholics still vote Democratic. According to an article in Washington Monthly November 16, 2009, “A year ago, according to exit polls, President Obama won 53% of the Catholic vote, seven points stronger than John Kerry's total from 2004.” Also mentioned in this article is the fact that pro-choice Catholics now outnumber pro-life Catholics 47 to 42 percent. Among those who attend Mass weekly, the percentages were heavily skewed in the opposing direction with pro-lifers at 63 percent and those who are for legalizing abortion at 30 percent. Among the Catholic Americans who attend Mass less often, pro-choice again outnumbered pro-life Catholics 61 percent to 29 percent. The Democratic Party’s economic beliefs also play a role in attracting Catholic voters. Catholics may feel the Democratic Party is more sympathetic to the poor since their party platform advocates giving handouts and redistributing wealth to the poor. Yet the Democratic Party’s policies hurt the poor and discourage charitable giving. Hence, Catholics need to reconsider their party allegiances so that their voting reflects concern for the issues that are most important to them and that are being better legislatively supported.

If Catholics want to give to the needy, they should give to the Church or a charity, instead of voting in officials who believe in big government and an entitlement society. Instead of allowing the government to spread the country's wealth, Catholics can donate their personal wealth as an expression of their freedom and faith. After all, giving toward a charitable cause you believe in, is more philanthropic giving bureaucrats the power to determine where the country's extra money goes?

Some argue that with a lack of federal funding, charities lose money. Why? Because priority is put elsewhere, into programs such as Medicaid that are put into the entitlement category, which means, by law, Congress has to continue leaving room in the budget for them and is not allowed to cut their spending. Social security is also in this category. In fact, two-thirds of the budget consists of entitlements, which are not up for budget cuts. Therefore, when any of your electorates, for example, say they're going to cut spending across the board, they mean in the areas they are allowed to touch—that is, one-third of the Gross Domestic Product.

It certainly won't help to increase taxes, thereby depleting money from American pockets. Without extra money in people's personal budgets, there is little incentive to give elsewhere. By continuing to burden working citizens with fiscal, governmental intervention, Uncle Sam encourages hoarding your money instead of giving it away to those in need.

Tax write-offs, on the other hand, are a brilliant way to provide incentives to those who choose to give. If those who by nature and faith choose to donate their money to charities are alleviated from the burden of government intervention through tax write-offs, it makes sense that they will continue to exercise their philanthropic right. As soon as the government steps in and eliminates this incentive, the country risks seeing people shy away from giving as much--if at all.

Government intervention such as Mr. Obama’s new policy of reducing tax write-offs for charitable donations will ultimately discourage people from giving. As is the rule for any good medicine and any government, “First, do no harm.”

-Robyn Wethington is an outreach coordinator for The Edmund Burke Institute. She is also a student at the University of Missouri's School of Journalism where she is majoring in Strategic Communications with a minor in Political Science.

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