Obama to Charities: Bite the Hand that Feeds You, or Else!
By Mary Theroux • Wednesday December 12, 2012 5:30 PM PDT • 6 Comments
Does President Obama hate private charity, or does he think only the government should take care of people? Does he just hate the idea of anyone directing their own money as they choose, or what?
For whatever reason, for now the fifth time in his administration, he’s proposing eliminating or limiting the tax deductibility of charitable contributions.
This time around he’s using some interesting tactics, and charities caught in the cross-fire might do well to learn from church leaders who helped push Obamacare to their congregations what happens to amateurs who play politics with the big boys. (Hint: they may find themselves badly burned in the process.)
In the current campaign to get more tax revenue from “the rich,” the White House called in the heads of various charities for a little gentle arm-twisting:
Senior Obama administration officials invited nonprofit leaders to the White House this week to enlist them to push for increased taxes on the wealthy...
“The president has been very clear on this: They are looking to increase rates on the wealthiest 2 percent,” said Stacey Stewart, president of United Way USA, who attended the White House meeting. “They were asking us to lend our voice to that.”
And how did the White House go about trying to persuade these non-profit leaders to “lend their voice”?
The White House officials said that the charitable deduction is more likely to be altered if the president does not succeed in raising tax rates on the wealthy, according to Ms. Stewart.
Charity leaders had been very busy on Capitol Hill, urging lawmakers to reject any limitation or elimination of the charitable deduction. The not-so-subtle ploy by the White House to have them add support for taxing the rich more puts them in a delicate position: if their wealthy donors find out they’re also lobbying to raise upper-income tax rates, will they respond by redirecting their giving to causes that didn’t get into bed with the White House? But if the private charities don’t help Obama pass higher tax rates, will he retaliate by yanking or limiting the deductibility of contributions?
A tricky calculus, indeed.
And a rare peek at some of the most distasteful gamesmanship imaginable.
For this is not a political game where all that matters is if the President “wins” or not. It is a game that involves people’s lives.
Anyone who is familiar with the non-profit sector knows that ever-increasing amounts of federal aid directed to the poor has not decreased poverty, but has, rather, vastly increased the need for more and more private charity.
Even as the number of American families receiving federal assistance ballooned over the past 4 years, demand for services by agencies such as The Salvation Army increased, for example, by up to 80% for programs serving families with children. My local Salvation Army is serving double the number of children as last Christmas.
And what’s the projected impact of the president’s proposed change in the charitable deduction?
Changes in the charitable deduction are conservatively projected to reduce contributions from individuals by 2.5 percent. With individuals contributing $217.79 billion in 2011, that’s a drop of $5,444,750,000, an amount that would run the federal government for 8 hours, but covers nearly two years of budget for the Salvation Army, serving 30 million people annually in need due to poverty, addiction, natural disasters, and just plain bad luck.
And for the Keynesians in the audience, here’s a real multiplier: for every person employed in the non-profit sector, another 5 people volunteer. You won’t get that when you divert those dollars to your friends in DC. (“Hello, IRS, I’d like to volunteer for a day!”)
But if numbers leave you cold, just think about who you’d like turning up on your doorstep in the aftermath of a hurricane: FEMA, or the Salvation Army?
Unfortunately, when only the feds are around to help, it turns out they’re often nowhere to be found.
Let’s not cut off the lifeline that actually serves those most in need. Surely Washington can learn to live with a little less pork.
Tags: Budget and Tax Policy, Charity, Children, Christianity, Civil Society, Family, Poverty, Taxation, Welfare 
Once the Income Tax entered onto the American stage the death of the American Republic was inevitable. For years many patriotic and concerned Americans have been fighting a valiant battle to try and defeat the IRS only to be marginalized and ridiculed. Most people relied on tax accountants and tax lawyers to steer their economic life to “legally” pay the least amount of taxes. People lived with that arrangement for years. They knew,with the right deductions,write offs,trusts etc. and the correct arranging of their economic lives that they could avoid most of the punitive tax damage to their success by keeping most of the wealth they had created in their lifetime. They did this without realizing that sometime in the future the political and fiscal situation would become so desperate for the Political Class that those methods of economic arrangements could change. Today that is what is happening. This lack of deductions for charitable contributions is only the beginning. Soon the Federal Government is going to nationalize the 15 trillion or so dollars that are tied up in 401k and IRA accounts. This will be done as a swap out of the assets in exchange for Treasury Bonds which will pay a paltry 3%. Real inflation today is about 9%. On top of this,the government is setting up an economic police state to make sure that everyone pays their “fair share.” This will be done from cradle to grave by numbering people from birth (Social Security Number) and forcing the people to use that number if they want to work,trade,buy or sell even something as trivial as a pack of gum. There’s even talk of implanting an economic computer chip into every citizen to better follow their activities. The plans for the economic future of Americans has been laid out to the point of making tax serfs out of the population. No economic privacy whatever. Big Brother knows all. There will be no need for tax filing or accountants,the government will take whatever it deems necessary and then tax whatever is left over. All of this stems from the Income Tax that people use to think they could avoid by “smart tax planning.” But no longer. Its either or. No third way. No compromise. Either Americans fight to get rid of the Income Tax,root and branch,or live in a land of servitude and serfdom. The choice is yours.
libertarian jerry | Dec 12, 2012 | Reply
LJ: I agree with many of your statements, but the federal government is so addicted to power and control that it would not scale back it’s privacy-invading activities even if the income tax were abolished.
Re the article: As noted, Obama pushed for elimination of charitable contribution deductions years ago. Obama lies about everything and failed to keep every one of his campaign promises. Thus, his promise to retain the charitable contribution deduction if tax rates are raised on high income households means nothing.
MingoV | Dec 13, 2012 | Reply
It is thoroughly consistent with the worldview Obama clearly holds to have the federal government control completely all forms of ‘charity’. Charities that aren’t on the public dole cannot be controlled, and it is evident that this is what the King wants. There is nothing worse for such a ruler than people who think for themselves and have resources to do good in the way they want to do it. By removing the deduction for charitable giving, which I suspect is ultimately on the radar, Barry O and his cronies can exercise a much greater degree of control than at present, and continue to transform government into the Messianic state they envision.
ToddP | Dec 17, 2012 | Reply
President Obama should not cut off the tax because if he did how will the government make money and pay debts? I think he should encourage adults and every illegal immigrants to work and also pay taxes. And bring back businesses regardless of its size. Also why not reduce imports by taxing more on it?
Kenzi Rosin | Dec 20, 2012 | Reply