Health Care and the Impact on Charitable Donations

While leaving my New Year’s greetings at some of my favorite blogs, I made a stop at Observations. James had an article posted on health care and its impact on charitable giving. In a nutshell, it seems Senators Rockefeller and Kerry decided that if only a 35 cent deduction on each charitable dollar was given back to the donor as a tax deduction, that will leave a tidy sum for government to apply to the mammoth cost of their health care bill.

I found this very interesting, and I think you will too. Note that President Obama is prepared to deny a portion of the deduction to taxpayers, who give out of compassion, and then turn around and give big-dollar grants to…whom? You can be certain only Liberal-pet-non-profits will benefit from this new government program, while your church and local organizations suffer. Really, its disgraceful.
Damage from health care reform reached beyond health care boundaries
by James Shott at Observations

of so-called health care reform believe terrible things will happen if
some version of it passes and gets signed into law. Most of the damage
will occur in obvious places, such as to doctors and hospitals, to
those who are happy with their existing health insurance, and to
everyday Americans, whose taxes and cost of living will rise.

But it will also affect areas outside health care, like private charity.

can reforming the health care system and health insurance industry
affect charities,” you may wonder?
It may seem like a weird disconnect,
but it does because, like so much of what liberalism attempts in
pursuit of a “perfect” society, it produces consequences that either
are unforeseen, or those consequences get written off as acceptable
sacrifices in order to achieve what liberals see as the greater good.
So, if charities suffer in taking over the health care system, that’s

formulation of the Senate Finance Committee’s health care bill, a group
including Senator Jay Rockefeller (D-WV) and John Kerry (D-MA) proposed
an idea that would raise billions of dollars in additional tax revenue
to help offset the enormous costs of the health care takeover by
limiting the value of itemized deductions, such as donations to
charity. The proposal would hold the value of charitable deductions at
35 cents on a dollar,
while the top tax rate rises to more than 39
percent when the Bush tax cuts expire in 2011.

when Senate Democrats passed their unpopular health care bill in the
middle of that snowy night on a strict 60-40 party-line vote, Democrats
said “Merry Christmas” to America’s poor by reducing funding for
charities that assist them by billions of dollars each year.

Husock, the Vice President of Policy Research and the Director of the
Manhattan Institute’s Social Entrepreneurship Award, explained that
“when a similar proposal was advanced early this year by President
Obama, the long-time head of the National Bureau of Economic Research,
Martin Feldstein, estimated it would lead to a $7 billion drop in
charitable giving.”

have already taken a big hit, according to the Chronicle of
Philanthropy, which reported that six of ten United Way chapters saw a
decline in giving last year, totaling $4 billion.

a coalition of 15 major charitable organizations that are concerned
about the situation wrote a letter to Senate Finance Committee chairman
Max Baucus (D-MT) stating that “charities have seen an increased demand
for their services as individuals and families struggle with financial

underlying assumption of the Democrat’s scheme seems to be that “we’ve
got to get money from anywhere and everywhere to offset the exorbitant
costs of our health care reform, and government can do a better job of
spending charitable dollars than people can.” So, to pay for its
takeover of one-sixth of the private economy, the federal government
now will take money the people intended for the charities they deem
important, and will substitute the judgment of individual Americans
with the judgment of a federal bureaucracy in deciding how the funding
should be used and which charities will get funding.

preparation for this not-yet-collected treasure, the Obama
Administration has already announced the establishment of a new White
House Office of Social Innovation which will make grants directly from
the White House to individual non-profit organizations.

just as some industries jumped on the health care reform and
cap-and-trade bandwagons to insure their survival against an overly
aggressive government, some non-profit organizations support this idea,
putting themselves in the position to attract “government money” that
will enable them to survive and thrive, even as charitable donations
drop by billions of dollars a year.

government calls the shots instead of the people, those intended
charitable dollars will be used to support the administration’s
purposes, not the people’s purposes, and certain “preferred”
organizations and causes get a subsidy. “This government-led giving
contrasts sharply with the wide-ranging, sometimes quirky, but
historically creative nature of American philanthropy,” Mr. Husock said.

Williams, senior fellow at the Tax Policy Center, said it’s impossible
to calculate the exact effects of all the tax changes, but he said the
overall result is clear – less philanthropic giving. “This will lead
people to give less to charities if they behave the way they’ve behaved
in the past,” he said. “We’ve already seen a drop in giving as a result
of the economic collapse. On top of that, this will just reduce the
amount of giving.”

of Management and Budget Director Peter Orszag has noted, however, that
the recovery act calls for “$100 million to support nonprofits and
charities as we get through this period of economic difficulty.” Do
Senate Democrats and the President really think that taking more money
from those citizens with the most to give to charity, and reducing
charitable giving, and then replacing billions of lost donations with a
few million dollars controlled by the government will have no negative

the American people recognize that the measures President Obama and the
Congress are promoting will wreck their country in time to stop them?