Wednesday, March 11, 2009

More redistribution

Limiting tax deductions for charitable giving is just another arrow in Obama's quiver to turn us into the SSA.*
White House budget chief Peter Orszag wrote on his blog: "If you're a teacher making $50,000 a year and decide to donate $1,000 to the Red Cross or United Way, you enjoy a tax break of $150. If you are Warren Buffet or Bill Gates and you make that same donation, you get a $350 deduction -- more than twice the break as the teacher." This Administration wants to turn even philanthropy into a class issue.

Mr. Orszag revealed the real agenda at work when he pointed out that the money taken from the "rich" would be used to fund such Obama state-run charities as universal health care. The argument is that any potential declines in private gifts, whether to universities or foundations, will be balanced by increases in government grants paid with higher taxes -- redistribution by another means. This is how Europe's welfare state works: Taxes are so high that private citizens have come to believe it is only the state's duty to support cultural institutions and public welfare. The ambit for private giving shrinks.

The real implications of this plan reveal how diametrically opposed this administration is to free markets. Everything is becoming a class issue and the prevailing philosophy is to redistribute so that the government is in charge of outlays to sectors like healthcare and education. Now it makes total sense why Obama has always given such a low percentage of his income to charity, as we've pointed out in the past. He just fundamentally views the state as the primary driver. It's a very different way of looking at things. It'll be interesting to see if this tax deduction limit makes it through to the final bill.

* Socialist States of America

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