In a recent teleconference, Barack Obama said that he would greatly reduce the amount of charitable tax deductions individuals and businesses who make over $250K can make on their tax returns in order to help pay for his health care plan. What a horribly conceived idea. This move will cripple many nonprofits across the nation.
Let’s examine why. Yes, the Bible does say give so that your left hand doesn’t know what your right hand is doing, but the truth of the matter is, that’s not how most individuals or corporations choose to operate. When you remove the tax incentive from them, they simply will stop giving. This is unfortunate, because, as one who worked for a nonprofit for three years knows, most charities subsist on the large corporate donations. While the small $25 widow’s mites are genuinely appreciated and coveted, they do not add up enough to cover the overwhelming costs of BOTH running a small corporation as well as doling out resources like food, medicine and education, to those who need it. Most nonprofits work on skeleton budgets as it is already, with much of the staff accepting lower pay than their for-profit counterparts might receive. A lot of the fundraising efforts are spent to find the big donors who are looking for a nice tax write off. While this motivation may not be “ideal,” there is nothing government can or should do to change that.
Barack Obama must know this (or be grossly naive), so why would he propose such an idea? I have my theories.
First, charitable writeoffs take away tax dollars from what otherwise could be used by the government agencies that perform the same services. In essence, private charity is in competition with government for the same dollar, to be used, in theory, for the same purpose. If Obama removes the incentive to give to charity, that money gets funneled into the government instead, so that the government programs end up having a competitive edge over the charities. I find it interesting that when given a choice, most donors would prefer private charities to handle the problems of homelessness, sickness, feeding the hungry, providing after school programs for troubled youth. By removing the writeoffs, government puts restrictions on that choice, meaning if one wants to give to the private charity, they have to do so in addition to giving to the government programs.
The problem with government programs is the lack of competition. We all have heard of corruption occurring within various private charities through the years. The advantage, however, is that if you find an issue with one private charity, simply pull your funds and give to another that does the same job. There are countless of watchdog agencies that do their best to investigate all the various nonprofits, so that one can be an informed giver. Corruption exists because humans exist.
Government lacks that kind of oversight. When corruption occurs, one cannot choose to stop paying taxes. Even when corruption is exposed by various media groups, change is very slow to take place.
The other possible motivation for this (and I’m not saying this is Obama’s motivation, although I’m sure it certainly belongs to a few who support this legislation) is that the greatest source of nonprofits are Christian agencies. I know that there has been a concentrated effort to extinguish Christianity by lobbyists and some in congress. What is the best way to shut down any organization? Remove their source of revenue. This proposal will do just that, forcing many Christian agencies to close their doors.
Thus, I vehemently oppose this idea.