Friday, December 07, 2012

Fiscal Cliff Proposals Assault Charitable Giving

by: Bryan Baumgart - 12/7/2012

As I described in my post on "The Role of Government", if we truly wish to take care of America's poor and needy, it must be done through charity. 
Progressive taxation aimed at redistributing wealth to the needy is well intentioned, but eventually succeeds only in destroying wealth and creating poverty.

Economic policies that lead to wealth creation and encouraging charitable giving through tax credits not only result in more effective social assistance, but guarantee the sustainability of that assistance.
Characterized as "loopholes", tax credits for charitable giving now find themselves on the chopping block in the infamous fiscal cliff negotiations.

Because the majority of charitable giving is made by wealthy Americans, the Democrat's tax hike proposal is sure to have a negative affect on charitable giving.  The Republican's counter proposal isn't any brighter for charities. In the past, it was President Obama pushing for reduced tax credits for charitable giving, but now we find the GOP putting forth a plan calling for the same.

Their proposals would not only negatively affect charities, but colleges, universities and hospitals as well. Donations are the primary source of income for most charities and because these donations are encouraged through resulting tax credits, removing this incentive would likely be devastating to charities and non-profits who often receive a third to half of their annual donations in the month of December as people begin to think about income taxes and the need for deductions.

Colleges received just over $30 billion in donations in 2011, and the largest gifts most colleges receive are typically made with awareness of tax benefits.
“There’s just no question that it will hurt charitable giving.” - Charles Phlegar, vice president for alumni affairs and development at Cornell University
The deduction for charitable giving costs about $52 billion in tax revenue per year, but the assistance it provides to America's poor and needy is immeasurable!!!

Tell your representatives to leave the charitable giving tax credit alone!!! 

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