Obama Targeting Charitable Deductions

President Obama has proposed decreasing the charitable tax deduction for wealthy taxpayers. The USA Today reports that "Obama's proposed 2010 federal budget contains a 7% cut in charitable tax deductions for the nation's wealthiest taxpayers... Americans whose household income exceeds $250,000 a year...can currently save $350 in taxes for every $1,000 donated to charity; under Obama's plan, that amount would drop to $280 per $1,000 donation." Speaking at a news conference Tuesday evening, Obama said "there's very little evidence that this has a significant impact on charitable giving." He went on to say that "if it's really a charitable contribution, I'm assuming that that shouldn't be the determining factor as to whether you're giving that $100 to the homeless shelter down the street."

"By doing this, you raise the cost of giving" said Roberton Williams, a senior fellow at The Tax Policy Center, a liberal Washington think tank. Williams' estimates directly contradict those of Obama who says there will be no significant impact on charitable giving. The USA Today reports that "by Williams' calculations the change will result in a 10% drop in charitable giving by wealthy Americans, who typically contribute about 20% of all charitable dollars. In real dollars, Williams projects a decline of about $6 billion in charitable donations because of the change."

It seems especially relevant to examine Barack Obama's own charitable giving as he lectures Americans about what the "determining factor" in giving charity should be and as he prepares to cut charitable deductions. Obama's own charitable giving reveals that Obama has no moral authority to stand behind his podium and lecture other Americans about charitable giving. Professor Arthur C. Brooks, the Louis A. Bantle Professor at the Syracuse University's Maxwell School and a visiting scholar at the American Enterprise Institute, has written about the charitable giving of Barack Obama. Professor Brooks notes that "between 2000 and 2004" the Obamas "gave less than one percent of their income to charity, far lower than the national average. Their giving rose to a laudable five percent in 2005 and six percent in 2006, with the explosion of their annual income to near $1 million, and the advent of Mr. Obama’s national political aspirations (representing a rare case in which political ambition apparently led to social benefit). According to an Obama spokesman, the couple’s miserly charity until 2005 'was as generous as they could be at the time,' given their personal expenses. In other words, despite an annual average income over the period of about $244,000, they simply could not afford to give anything meaningful.... The Obamas got rich in 2005. Their income increased sevenfold from 2004 to 2005, mostly because of Mr. Obama’s book royalties, and stayed very high in 2006 for the same reason. In 2005, another wealthy political couple with significant book royalties was Mr. and Mrs. Cheney, who had a combined income of $8.8 million, largely due to Mrs. Cheney’s books and the couple’s investment income. Just how much did the Cheneys give to charity from their bonanza? A measly 78 percent of their income, or $6.9 million. (No, that is not a misprint.)"
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