Weekly Column:   –  “Nothing signals the shift from presidential politics to presidency like the shift in the vocabulary over taxes.  We’ve gone from talking about tax relief to talking about tax increases.  Some proposed tax hikes are buried beneath new mandates on American businesses.  Some are stealthy in other ways.

The first and most important thing to do when thinking about the tough economic times our neighbors are going through is to consider charitable ways to help alleviate suffering.

A troubled economy is felt at the local level as an increase in unemployment, illness, hunger, and even homelessness.  It would be inhumane to raise taxes on a family going through any number of these challenges.  The newest stealth tax on the table in Washington, however, doesn’t go after these Americans.  Instead, it taxes the charitable contributions of their benefactors.

Across the country, charities are speaking up about the potentially devastating effects of the president’s proposed tax increase on charitable contributions.  Faith-based institutions, community service organizations, universities, and hospitals which rely on donations are all highly concerned about any tax that poses a disincentive for giving at the height of a difficult economy. 

American taxpayers who fall into the tax bracket most affected by the change account for only three percent of taxpayers.  But reliable estimates indicate those Americans are responsible for roughly 44 percent of all charitable giving – more than $81 billion in charitable gifts.  According to the Center on Philanthropy, the tax increase on gifts would eat up about $3.9 billion of charitable contributions in its first year.  And according to another estimate by Harvard economist Martin Feldstein, a member of the president’s Economic Recovery Advisory Board, the new tax would suppress giving by more than $7 billion in its first year.
If there was ever an opportunity to enable neighbors to help one another in a time of need, it’s now.  I am very disappointed in this budget proposal, and I certainly hope the administration and congressional leaders change course, finding ways to boost philanthropy and not to discourage it.

Charitable giving is not a way to avoid paying federal taxes – it’s a chance for well-meaning Americans to direct their generosity to the people and organizations they want to support.  The federal government should not do anything to discourage this conscientious behavior of American citizens. 

Still, the $42 trillion, ten-year budget the president has proposed must be paid for somehow.  An increase in the tax on charitable donations is listed side-by-side with far-reaching revenues from taxes on carbon and greenhouse gases.  According to the rhetoric, these new taxes focus on businesses – by which they mean employers.  Elimination of the tax deduction for home mortgage interest will hit homeowners in the pocketbook while, incongruously, other federal programs spend taxpayer money to help troubled homeowners renegotiate the terms of their loans.  And the tax hike on charitable contributions which they say targets the wealthy is just as misguided.  It will miss its intended target entirely, instead striking at the heart of Americans who most need help facing the very real personal conditions of very severe national economic problems.”