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  • Obama Makes Fifth Attempt to Reduce Charitable Tax Deduction

    Once again, President Barack Obama has proposed lowering the income tax deduction for charitable giving. In his proposed budget for fiscal year 2013, the President calls for reducing the charitable deduction rate from 35 percent to 28 percent for those in the top tax bracket (individuals making $200,000 or more or families making $250,000 or more). By decreasing the value of itemized tax deductions for higher-income taxpayers, Obama’s proposal would weaken the incentive for the wealthy to give to organizations that help the poor.

    President Obama has tried this before. Not once, not twice, not three times, but on four previous occasions, he has put forward a plan to lower the deduction rate for wealthy donors (twice in previous budget proposals and twice in funding proposals for other priorities, including Obamacare).

    As The Heritage Foundation has previously noted, the President’s plan would likely dampen charitable giving at a time when nonprofits have been forced to do more with less. The greatest impact would probably hit organizations like hospitals and educational institutions that depend on large gifts from wealthy donors. While these donors make up only a small percentage of total American households, they contribute almost half of the donations claimed each year as charitable deductions.

    How far would Obama’s proposal cause total itemized contributions to fall? Experts predict up to $5.6 billion each year. This is only a small percentage of total annual charitable donations, but it is more than the annual operating budgets of the Ameri­can Cancer Society, World Vision, St. Jude Chil­dren’s Research Hospital, Habitat for Humanity, and the American Heart Association combined.

    This proposed tax change was wrong when we wrote about it before, and it is wrong now. The tax deduction for charitable giving not only incentivizes giving to organizations that serve the needy but also allows citizens to control more of their own money, from which they can potentially donate more to charity. Sadly, President Obama seems to believe that federal government bureaucracy can deploy the resources of the wealthy more effectively than nonprofit, civil society organizations.

    If enacted, the President’s proposal would harm charitable organizations while moving the dial of social responsibility one more notch in the direction of the state. Sadly, many of these nonprofit organizations are the same charities whose religious liberty is under attack by Obamacare’s anti-conscience mandate. As Yuval Levin of the Ethics and Public Policy Center points out in a video produced by Heritage, President Obama has engaged in a pattern of weakening the status and identity of civil society institutions. The result: Citizens will have far fewer options for help and, ultimately, less freedom.

    Posted in Culture [slideshow_deploy]

    13 Responses to Obama Makes Fifth Attempt to Reduce Charitable Tax Deduction

    1. steve h says:

      Let's scream about the deficit and debts that we created (see your own 2001 pieces saying we should not pay down the debt too quickly and too much surplus is dangerous, hence we need more tax cuts), and let's follow up our screams about deficits by screaming about every single proposal Obama and Dems offer. No wonder GOP Congress and conservatives have lowest approcal ratings of all and Senators like Snowe are running for the hills.

    2. Stirling says:

      If you consider all the "sanatizing" that is going on by this administration in what make the United States unique and exceptional this is annother piece in trying to tear us down to the level of every other country. Think of all the good that could be achived if the charitable donation deduction could be higher. The fact they want to lower it should tell the average person that this administration does not promote caring for your fellow citizen. A comparision to those countries that have no charitable giving or deductions could show people the result of where this will lead..

    3. Andrew says:

      If your donation is truly a chartiable act, you don't need — or want — a deduction. Somehow charity existed for generations before the deduction came along. Giving will continue after the deduction goes away. The tax code shouldn't be used to encourage certain behaviors.

      • Stirling says:

        So you saying you would do away with every tax break for liberal chaitable intrests as well ? Like Higher Education (colleges), and others that one could list… This administration would rather see the government as the center of the "Charity world" thru their class warfare to dis-insentivise everything that the wealthy normally do with their money. I dont' see liberal charities targeted as much as conservative ones during this administrations time in office, which is why I have issue with this purposal.

      • David says:

        If the "tax code shouldn't be used to encourage certain behaviors", then why not remove ALL deductions AND "credits" (another name for deductions) for EVERYTHING the IRS tracks: deductions for home mortgage interest; for solar panels; for energy-star appliances and homes; for child day-care; for national and world relief orgainizations; Red-Cross; "planned" parenthood; earned-income credit; medical costs (above 7% percentage of your gross income); etc.; etc. ? The fact that "charity existed for generations before the deduction came along" is true, so why do we need all the above listed deductions allowed by the U.S. Government when, as you say, charity "existed" for them too. Just make EVERY actual CITIZEN of the United States a 501(c)(3) entity and then we can send our "charity" to them as we see fit? The government should not be subsidizing anyone or anything or another country.

      • Tom says:

        The country existed for generations without an income tax. How about taking this away from the Big Spendthrift?

    4. ataraj says:

      As a couple in the 35% bracket, I can tell you that we do give more because of the deduction. I would MUCH prefer the 35 cents of every one of those dollars going to a charity of MY choice rather than the federal government. It does encourage giving for that very reason. Maybe I want to actually SEE the effects of my donations in my community…a new animal shelter, to provide kids free dental care, to support Big Brothers/Big Sisters. Obama is a fool to even suggest this. How about stop giving federal dollars to failing "green energy" companies instead??

    5. creeper says:

      Americans were taking care of their own long before the federal government got generous with our money.

      Did you know that the mileage charges you can deduct vary from 51 cents per mile for business purposes, down to a whopping 14 cents for charitable reasons…delivering meals on wheels, etc. Our government doesn't much respect private giving. They'd rather take our money and dole it out.

    6. Bobbie says:

      Obama purposely overburdens private charities to eliminate their existence for obama's change in American government that's anti-American. Not because private charities are a threat, safety or health issue to the public but because it operates freely until the government is threatened by the self respect people develop through private charities unlike the government charities whose agenda is promoting personal weakness to create government make work jobs that keeps people dependent. Plus Obama can't handle the inspiration of tolerance, acceptance and good will private charities encourage all people in need, without discrimination. Unlike the unconstitutional government.

      the President is just as much Christian as he is a devout scholar to the proper meaning of the American peoples' Constitution. And we now how devout that is!

    7. George says:

      We as Americans have always been a charatable country and we should always be a charatable country because that is what works for us and has made our country great. If it works why fix it. Does it really matter if the charity comes from a person or from our government? It should not. All I care about is that the charity or person that the money goes to does not waste the money and then stand back in line for more. I say America keep giving and keep being the great America that we have always been.

      • Bobbie says:

        the difference between getting help through private charities and government charities? Charities funding is by the peoples' choice to contribute to specific charities through their personal freedom of choice, again. Government can call anything a charity and demand more money without a cause and at any time without peoples' choice. Government is corrupt with all peoples money. Charities that are honest, don't afford to be corrupt and accurately selective on who is in actual need because not all that ask for help are truly in need. Just deprived of their human intelligence that isn't a government benefit.
        government wants controlled situations, not help the needy.

        America is a charitable country through freedom and good will of the people not the corruption of the government.

        why expand the purpose of government when charity has always been between fellow Americans? Involving government only adds cost and increases control and provokes more corruption. What majority of Americans are in the position to "want" this take over of what they can't do without the government? What Americans is the President working for? I believe in charitable deductions that promotes a healthy society. Not ones that promote personality conflicts and inferiority complexes induced by controlling entities and authorities sponsored by government.

    8. DontTreadOnMe says:

      Dear American Citizen:

      Congratulations on being so wealthy!

      You have either a.) inherited your family's wealth, b.) won the lottery or, c.) worked hard and earned it (please circle one). Although it really doesn’t matter how you've become so wealthy, I wanted to share with you my plans for your money. You may notice a slight increase in the amount I'll be taking every pay period. Don't worry it's supporting a good cause, trust me. I also want you to know that I'll be reducing the allowance which you’ve been using to support those silly non-profit groups in your area. I know you would agree that I am much more in tune with your community needs than you are. Don’t you think? Great! I'll take it from here.

      Well, that's all I needed to say so have a good life and keep up the great work!

      Your friend,


    9. PatriotUSA says:

      Reduction or elimination of charitable giving especially from those who give most will adversely affect the institutions that benefit the donations. Examples of these are healthcare e.g. hospitals, schools (colleges and universities), scientific research, National Red Cross, disaster relief programs, etc.
      Therefore the Federal government will be able to collect huge amount of Federal taxes. The Federal government will create programs for charitable giving to make it appear that they are the parties who are charitable and compassionate, when in fact the money they are giving is not theirs but forciibely taken from the people who earned it.

      Why not allow the people who earned the money to give their donations to the charities., instead of the government taking the credits for giving? This is very dishonest.

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