Call me a cynic, but I am not convinced that President Barack Obama is all that interested in reviving this struggling economy. Despite the Congressional Budget Office estimating the budget deficits over the next ten years being much higher than White House projections (see graphic above), the President gave every indication Tuesday evening that he will press on with his outrageous economic proposals. What lends even more evidence to my cynicism of President Obama’s sincerity is the fact he brushes aside any fiscal concerns in the name of “fairness”.
One point of contention is the President’s plan to limit the richest American’s deduction rate for charitable contributions. Currently, the wealthiest one percent of Americans are able to deduct on their tax returns 39% of what they give to charity. Under Obama’s plan, he would slash that tax benefit to only 28%. The President rationalized it, of course, under the guise of what’s fair (emphasis mine).
In that sense, what it would do is it would equalize. When I give $100, I'd get the same amount of deduction as when some, a bus driver who's making $50,000 a year, or $40,000 a year, gives that same $100. Right now, he gets 28 percent, he gets to write off 28 percent. I get to write off 39 percent. I don't think that's fair.
Besides, when one is giving to charity, one’s motivation should be pure, right Mr. President?
Now, if it's really a charitable contribution, I'm assuming that (the tax deduction) shouldn't be the determining factor as to whether you're giving that $100 to the homeless shelter down the street.
To me, that smacks of condescension. Mr. President, do you really think charitable organizations scrutinize the funds they graciously receive by gauging the giver’s motive? As long as the donations come from a legal source of income, who really cares?
When reminded of concerns conveyed by non-profit organizations that their revenues will decrease due to his rate change proposal, the President dismissed that contention saying there’s little evidence that there would be a significant impact. But key analysts respectfully disagree.
The Center on Budget and Policy Priorities said total charitable contributions would decline by about 1.3 percent, while the Center on Philanthropy at Indiana University calculated that overall giving would drop by 2.1 percent (PDF). The highest-income households would decrease giving by 4.8 percent, or $3.87 billion, the philanthropy center found.
"Charities and the public need to understand that in the current economic environment, which is creating difficulty for some nonprofits and their constituents already, this public policy change is likely to have an additional negative effect," Patrick M. Rooney, the philanthropy center's interim executive director, said in a statement. "However, changes in personal income and wealth, both of which have declined in the past year, have a greater impact on charitable giving than do tax rate changes."
Experts said nonprofits such as universities and arts organizations that rely heavily on large donations from wealthy individuals are more likely to be impacted by the administration's proposal than food banks, shelters and other social service groups that raise money in smaller amounts.
Again, that seems to be of little concern to the President. Remember during the campaign when presented with historical evidence that increasing the tax rate on capital gains would actually decrease overall tax revenues?
…what I've said is that I would look at raising the capital gains tax for purposes of fairness.
Hey, as long as we “spread the wealth” around, who cares if we’re saddled with eye-popping deficits? Under the Obama economic plan, “fairness” translates to all Americans being equally miserable.
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