Thursday, February 26, 2009

Obama's Charity Tax: The War On Charity

Obama announced today his $4 trillion budget. To help pay for this, one of the tax increases will be on charitable donations of the rich. (as well as mortgage-interest deductions since houses are selling too fast as it is and taxes on energy) Obama is planning on reducing the tax deduction of those in the top tax bracket, 35%, from the 35% they are paying for each dollar donated to 27%. That's effectively an 8% tax on charitable donations.

Clearly, this charity tax is going to drive down donations to charities, but is that a bad thing? Let us start this war on charity, because charities have too much money as it is. It's about time they suffered like the rest of America. They overpay their employees who enjoy plush jobs that they don't have to work at unlike our dedicated, government servants who work for too little in jobs that could be eliminated at any moment. They have such a demand for their services these days that they shouldn't have a problem making ends meet; after all, any business would die (some are) to get that much demand for their products now.

How is it fair that a rich person who donates say $1000 gets back the $350 in taxes they paid on that money, when those in the next lowest tax bracket pays $270 in taxes on that same $1000 and only gets back a measly, $270 and not $350? That rich person who worked to get that $1000 could have taken time off from work and donated their time and not made that $1000 that they donated thus getting back $350 they owed on it, but since they did work and donate they should only get back $270 after paying $350 in taxes on money they didn't keep. But what about the poor who make donations? They get back even less than $270 on $1000 they donate, how is that fair? If you don't pay taxes, you won't get any money back on your taxes for making a donation. (the really poor and Treasury Secretary Geithner) Clearly, the only fair thing to do is to get rid of charitable deductions.

And shame on that rich person, who having likely managed their money well by keeping a budget, should consider donating less because the taxes on that money they would donate would consume more of their budget. Not only should they donate the same irregardless of taxes, they should donate more so to offset the increased tax on giving, so that the government gets not a penny more than before, thus showing they don't just give to reduce their tax burden, but to spite the government.


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