Does Romney Want to Reduce Charitable Deductions for the Top 1 Percent?
6:03 PM, Feb 27, 2012 • By JEFFREY H. ANDERSON
A few months ago, when President Obama proposed to restrict the deductibility of charitable contributions made by relatively well-off Americans, I asked why Obama is so opposed to having money go directly to the needy, rather than having it first be filtered through the government. Yet last week, in the course of discussing his proposed tax policies at a campaign stop in Arizona, Mitt Romney said, “And by the way, I want to make sure that you understand, for middle-income families, the deductibility of home mortgage interest and charitable contributions, those things will continue. But for high-income folks, we’re gonna cut back on that, so that we make sure that the top 1 percent keeps paying the current share they’re paying or more.”
When Obama proposed that we restrict the deductibility of charitable contributions from higher-income Americans, former Major League Baseball commissioner Fay Vincent responded by saying the following in a Wall Street Journal op-ed:
“[Mr. Obama] 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.”
According to the New York Times, the top 1 percent of American taxpayers make about 17 percent of the income in America but account for about 30 percent of all charitable giving. To be sure, not all well-to-do Americans contribute generously to charity. Fox News reports that, before Barack Obama took federal office, the Obamas made $1.2 million over the previous five years, yet they donated only 0.9 percent or their income to charity (a little over $2,000 a year) — or about one-third of the percentage that most Americans apparently give.
Still, if changes in tax policy were to result in the top 1 percent reducing their philanthropic contributions, as they surely would, then most charities — and the people they help — would be hurting, which would invite government to step into the void.
This would seem like a strange policy for Romney to champion.
Recent Blog Posts