Charity Begins at Home—and That Means Taxes
The nonprofit sector has become infected with the shortsighted, quarter-to-quarter thinking that addles Wall Street.
About a month ago, I received a note from a public relations officer at the Jewish Federations of North America describing the Federations’ opposition to placing caps on tax deductions. Well aware that the debt-ceiling negotiations are completely out of my control (and probably out of anyone’s control at this point), the letter failed to move me to leap to the telephone and urge Congress to beat back this latest assault on the nonprofit sector.
But it wasn’t mere laziness that kept me from the front lines in this particular battle; it was actual disagreement, based on the letter’s own summary of the horrifying proposal:
Specifically, the Administration has proposed limiting tax benefits for charitable contributions for those earning over $250,000 (married) or $200,000 (single). The tax benefit of all itemized deductions, including charitable contributions, would be capped at 28 percent, and the Jewish Federations want the charitable portion to be exempted.
Thus, an extremely modest proposal for assuring that the wealthiest citizens pay some additional portion of our shared tax burden is considered a threat to the health and well-being of the hundreds of thousands of people served by the Jewish Federations—this, despite the fact that deductibility’s impact on giving is far from clear.
Listen up, gang. You want to see a threat to health and well-being? How about cuts in Medicaid, Medicare, the Affordable Care Act, Social Security, food stamps, child care, and education? The fundamental problem of the American economy is that we don’t pay enough in taxes to support the services we very reasonably demand. We don’t pay nearly as much in taxes as our quite conservative neighbors to the north, or our counterparts in Europe or Japan. So we don’t have the health care, the educational system or the family support services we need.
Even complete abolition of the charitable deduction wouldn’t make much of a dent in the shortfall we’ve created out of pure political cowardice and foolishness. The deficit is not the result of social spending but of three simultaneous wars piled on multiple tax cuts. So the hideous notion of a cap on deductions fails on the Willie Sutton basis: You don’t rob nonprofits because that’s not where the money is.
But. If there were what Everett Dirksen called “real money” hidden in the charitable deduction for wealthy families, it absolutely should be subject to revision, for the same reason that every other deduction and credit and tax dodge should: because those dodges enable the wealthy to pay less than their share and because this society needs more money than poor people’s taxes can provide. That is, if we want to continue those services necessary for us to remain a member in good standing of the developed world.
The Jewish Federations’ objection to this proposal—while completely understandable from their perspective—suggests that even the nonprofit sector has become infected with the shortsighted quarter-to-quarter thinking that addles Wall Street. Rather than consider the long-term good of the society they serve, the Federations are concerned about balancing next year’s budget. And while I don’t blame them for that—that’s their job—you’ll pardon me if I side with (and cite) a different giant of the American Jewish community, Samuel Goldwyn: “Include me out.”
Read a related post, “Not All Tax Deductions Are Equal: Preserve Charitable Contributions,” here.







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COMMENTS
BY William Daroff, The Jewish Federations of North Am
ON July 14, 2011 04:23 PM
AUTHOR’S RESPONSE: Ms. Kleiman’s response to my piece, “Not All Tax Deductions Are Equal: Preserve Charitable Contributions,” fails to recognize The Jewish Federations of North America’s positions on many of our top public policy priorities. What Ms. Kleiman neglects to mention is that every day, The Jewish Federations actively work with leaders in Congress and the Administration to find ways to support and strengthen Medicaid, Medicare, the CLASS Act, Social Security, food and shelter, and other programs vital to the most vulnerable among us. As evidence, this week the chair of our organization spoke before a room of 21 U.S. Senators to address these issues. Just as The Jewish Federations opposes cuts to these programs, which could potentially cripple our ability to provide needed services, we also oppose attempts to limit charitable giving that would even further limit that ability. We believe our nation’s most vulnerable deserve this support during the economic recovery and while government funding recedes. Ms. Kleiman implies that this stance is selfish but she incorrectly is looking at only one side of the equation.
One historical footnote: let the record show that The Jewish Federations are proud to count Samuel Goldwyn as one of our most generous contributors to our cause during his lifetime.