When Republican Scott Brown won election to the U.S. Senate in Massachusetts a couple of weeks ago, the political machinery of Washington almost ground to a halt as both parties reevaluated their plans and prospects. While the Obama White House, in particular, is retailoring its message and shaping a new strategy, pundits are offering a lot of opinion as to how to proceed, but no one is really certain now how things will shake out.
Perhaps that's why many opinion-makers are focusing on marginal issues, as Michael Gerson does in an opinion piece today devoted to the enduring question of tax deductions for charitable giving. He takes the Obama administration to task for proposing to limit the charitable deduction that people in the higher tax brackets may take.
I've always thought this is a non-issue because I believe that for the most part people (and even corporations) give for reasons other than taxes. In fact, most good investment advisors counsel never to make any financial decisions based on tax considerations alone. Experts disagree on how a reduced deduction would affect charitable giving; some say it would make no difference at all; Gerson, undoubtedly quoting the most favorable source he can find, admits that even the Tax Policy Center estimates the proposed change in rules would skim only about $10 billion off a total 300 billion in donations.
The side of the coin nobody every looks at in considering charitable giving is the extent to which we in the U.S. rely on voluntary contributions and nongovernmental organizations to perform functions that would otherwise be (and I would say should be) done by government. Be it hunger, poverty, health, or even such post-caveman niceties as support for the arts, we rely far too much on volunteers and donations to accomplish basic services to our citizens that are really the province of government. So, from my perspective, shifting funds away from NGOs and toward the government is not necessarily a bad thing.
Gerson also complains that the government is not seeking "fairness" (in which case it would let everyone take the high 35% deduction on their donations, regardless of their tax bracket) - no, not fairness but revenue. O anathema! This is the standard Republican blind spot, the laughable notion that government doesn't need to be paid for. Yes, Mr. Gerson, of course it's about revenue; otherwise there would be no need for a change.
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