Even Liberals Oppose Obama’s Plan to Reduce Value of Charitable Deductions of Rich Donors

March 11th, 2009 · No Comments

By way of Paul Caron, I found a Wall Street Journal article titled Charity Revolt – Liberals Oppose Tax Hike on Rich Donors:

Among those shocked by President Obama’s 2010 budget, the most surprising are the true-blue liberals who run most of America’s nonprofits, universities and charities. How dare he limit tax deductions for charitable giving! They’re afraid they’ll get fewer donations, but they should be more concerned that Mr. Obama’s policies will shove them aside in favor of the New Charity State.

I’m sorry, but stuff like this sends a tingling sensation up my leg.

Obviously, liberals who stand to gain from the largesse of the rich and powerful have no problem seeing and understanding the “trickle down” theory of tax breaks.

To wit, if you give the rich financial incentives to donate funds to charity, they will do so.

Doesn’t it then follow that if you give the rich financial incentives to expand business, create jobs and invest capital in blighted areas, they will also do so?

Why of course it does.

However, before we get ahead of ourselves and start celebrating the liberals’ come-to-Jesus-moment, we must recognize that there are still class-warfare, true believers out there.

One of them is none other than Obama’s budget chief, Peter Orszag. Listen to his silly defense of this silly policy proposal:

If you’re a teacher making $50,000 a year and decide to donate $1,000 to the Red Cross or United Way, you enjoy a tax break of $150. If you are Warren Buffet or Bill Gates and you make that same donation, you get a $350 deduction — more than twice the break as the teacher.

Well, duh!

It is the height of absurdity to promote a progressive tax system (i.e. the imposition of progressively higher tax rates for people who make more money) and then feign outrage because the value of tax deductions to those paying taxes at the higher rates is greater than the value of tax deductions paid by those at the lower rates.

(Note to Mr. Orszag: You can “egalitarianize” the value of charitable contribution deductions simply by having everyone pay taxes at the same rate regardless of their income level.)

Finally, here’s the Wall Street Journal on this latest demonstration of left-wing hypocrisy:

[T]he White House may have underestimated the power of the liberal nonprofit lobby.

The charity deduction cut is the only one of the President’s many tax increases that Democrats on Capitol Hill have publicly criticized.

Politics hath no fury like a rich liberal scorned.

Last Sunday, Bob Schieffer, the host of CBS’ Face the Nation, pointed out that “nobody likes taxes” and cited a little poem of the late Senator Russell Long (D-LA):