The Tax and Budget Consequences of Charitable Giving

Saturday, March 28, 2009

E.J. Dionne Jr. ["Deficit Dodge Ball," op-ed, March 26] defended President Obama's proposal to reduce the tax deduction for charitable contributions by echoing Mr. Obama's assertion that it is unfair for higher-income donors to get a larger tax break for their gifts. He also said that Mr. Obama's plan would only reduce charitable giving "marginally," by about $4 billion annually.

Although in Washington budget debates a $4 billion reduction might seem "marginal," in the charitable sector it will likely have a devastating impact -- especially on small community and social welfare institutions. Also, the study Mr. Dionne cited is at the low end, with others predicting a greater drop-off in giving.

Moreover, if the goal is tax policy "fairness," there is another way to achieve that result while bolstering America's charities: Rather than reducing the deduction rate for higher-income donors, we could raise the deduction rate for middle-income donors. This would not only spur more charitable giving in our times of great need, but it would also further another of the president's goals: cutting taxes for the middle class.

Yes, health-care reform is critical, and it must be paid for, but not by placing the burden on America's charities and those they serve.

NATHAN J. DIAMENT

Director of Public Policy

Union of Orthodox Jewish

Congregations of America

Washington


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