President Obama likes to talk about how “millionaires and billionaires” who make over $200,000 a year need“to give back a little bit more.”But by restricting charitable deductions, his proposed jobs bill would incentivize them to give back a little bit less. In today’s Wall Street Journal, former Major League Baseball commissionerFay Vincent takes exception:
“…Mr. Obama wants to pay for much of his new jobs legislation by restricting the deductibility of charitable contributions (along with other items such as home mortgage interest and state taxes) by those he has defined as wealthy….
“The president is under pressure to find ways to finance the $447 billion jobs plan he announced last week. Of that amount, he proposes to raise $405 billion over 10 years by limiting the value of itemized deductions….
“His plan may assume I will continue to give because the gift still will be deductible but to a lesser degree. Yet by attempting to increase my taxes in this indirect manner, the president is not only giving an intentional whack at us wealthy but he will likely punish those who benefit from our gifts….
“If tax policy influences behavior, increased taxes will reduce individual risk taking and make most of us more cautious. It is difficult to believe Mr. Obama would be willing to stand tall at the teleprompter to announce he wants fewer and lesser gifts to support minority education or medical research or any of the myriad other laudable programs and causes paid for by tax-deductible funds….
“Mr. Obama seems to believe that additional taxes will soak the rich. I believe he ought to look not at donors who will pay more, but at those who may get fewer and lesser gifts. There is no merit in a measure that would restrain individuals’ charitable donations in order to raise their taxes.”
Vincent’s piece begs the question: Why is Obama so opposed to having money go directly to the needy, rather than first being filtered through the government?