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Thu Dec 13, 2012, 04:58 PM

White House, nonprofit groups battle over charitable deductions

Source: Washington Post

But the White House is also looking to limit the charitable deduction for high-income earners, and that has prompted frustration and resistance, with leaders of major nonprofit organizations, such as the United Way, the American Red Cross and Lutheran Services of America, closing ranks in opposing any change to the deduction.

“It’s all castor oil,” said Diana Aviv, president of Independent Sector, an umbrella group representing many nonprofits. “And the members of the nonprofit sector I represent don’t want any part of it. It’s a medicine we’re not willing to drink.”
...
The frustration stems in part from what some nonprofit leaders describe as a philosophical disagreement between Obama and the non-profit sector. The president has framed the tax deduction as a benefit for the wealthy, they say, while in their view the deduction is a benefit for charities that use the money to help the needy.
...
But Kies acknowledged that “no one knows exactly” how much reducing the deduction would impact giving. A report last year by the Center on Philanthropy at Indiana University concluded that the effect of Obama’s proposals to reduce the charitable deduction and raise tax rates for the wealthy would be a “relatively modest decline” of up to 1.3 percent in itemized giving, or $2.43 billion a year. Other estimates have ranged as high as $7 billion a year.

Some in the sector are skeptical that there would be any significant change at all.

Read more: http://www.washingtonpost.com/politics/white-house-nonprofit-groups-battle-over-charitable-deductions/2012/12/13/80e67400-43f2-11e2-9648-a2c323a991d6_story.html



I think the President is wrong on this one. Incentivizing the well-off to help the less fortunate isn't a "benefit for the wealthy." Losing as much as $7 billion would really hurt social service agencies. There have been other deductions that have been talked about to get rid of; that conversation should continue, but I think the charitable deduction shouldn't be part of any "fiscal cliff compromise."

As Tocqueville noted, civil society and nonprofits are such an important part of a progressive society. They are laboratories for new initiatives and methods that can make huge impacts helping those in need.

It's such an important issue. I hope others agree that this needs a serious discussion and, at the very least, should be separate from any last-minute negotiations.

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Response to Project Grudge (Original post)

Thu Dec 13, 2012, 05:06 PM

1. First off, your source is the WAPO. Is it factual, or another fabrication?

 

The fiscal bluff fiasco has been red meat to those who make shit up.

Secondly, the rich give very little to these organizations. The numbers are out there.

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Response to Project Grudge (Original post)

Thu Dec 13, 2012, 05:08 PM

2. I have a problem with "charity" that provides only "fish" & not "the fishing pole", i.e. it doesn't

solve what problems it could solve and, in many cases, finances jobs on the backs of those who could be doing that work themselves, perhaps more efficiently, and more effectively, and for significantly less.

I know that not all charity falls into this category, a.k.a. noblesse oblige, but I have seen enough of it up front and very personal in the care of the elders in my family that I am quite interested in addressing this problem before I find myself at the mercy of professional, not-for-profit, do-gooders who aren't worth what they are being paid.

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Response to Project Grudge (Original post)

Thu Dec 13, 2012, 05:23 PM

3. I think its effect is over stated

I'm not all that convinced that the uber wealthy will particularly stop donating. You may see SOME declines, but the vast majority of that will be in vanity charities that people start as mostly a tax dodge, and/or as a way of employing friends and families.

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Response to Project Grudge (Original post)

Thu Dec 13, 2012, 05:44 PM

4. Start collecting on churches who politicize. That should solve our national debt problem.

And create us some good jobs in the meantime!

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Response to Project Grudge (Original post)

Thu Dec 13, 2012, 06:19 PM

5. This way or that way

I wonder which organization gets the best results for the buck, Us Govt or United Way?

I wonder what proportion of the money given by the rich to charity is given to real charities that do legit work for those in need VS how much is donated to designer charities who are actually special interest groups and political movements?

Right now, our purely voluntary donation system is serving the rich far more than those with needs. I would argue that taxing is, in effect, involuntary donation. So I say tax the rich on their money. The government can provide the social services. That is part of its function.

If your country has universal health care, you dont need the rich to feel like giving for poor people to get health care. For example. Right now, a rich person donates a bit, and we talk about how much they are needed. But many more do not give. Or give to self serving causes, and receive financial gain. Such as Romney donating millions to the Mormon church and writing it off as charity.

Charities are needed when there are gaps that need filled. In a better regulated and properly taxed system, those who give of their own free will, not for personal financial gain, will be plenty to fill the remaining gaps.

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Response to Project Grudge (Original post)

Thu Dec 13, 2012, 06:26 PM

6. the real wealthy have better loopholes that chartiable contributions.

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Response to Project Grudge (Original post)

Thu Dec 13, 2012, 06:38 PM

7. Nuke it. It unduly aligns the common interest with the interests of millionaires.

Sure some (or even many!) of those millionaires give to good causes but at the end of the day that's tax revenue being allocated to THEIR causes.

There will still be donating, just reduced by the marginal tax rate of the donators for the donators that were donating their preference plus their tax benefit. And I'm sure there are donators that donate regardless of tax benefits so they'll continue to donate the same amount.

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Response to Project Grudge (Original post)

Thu Dec 13, 2012, 06:47 PM

8. It's hard to believe the deduction has no impact on middle-class giving:

somebody paying 33% in taxes gets to give $100 but with an actual out-of-pocket bottom-line cost of $67

We could probably tighten up the rules on what constitutes a charitable organization: there do seem to be a lot of "charitable organization" that do very little charitable work, other than paying somebody a huge salary

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