The Union of Orthodox Jewish Congregations of America (Orthodox Union), the nation’s largest Orthodox Jewish umbrella organization, expressed its concern regarding the impact that House Ways and Means Committee Chairman Dave Camp’s recently unveiled tax reform plan could have on the level of charitable giving in America.
Chairman Camp’s proposal hurts the charitable community in three distinct ways: by imposing a two percent income floor on the first dollar of deductible contributions, by decreasing the deductible amount of annual contributions and by limiting the value of deductions for property.
Nathan Diament, Director of Public Policy for the Orthodox Union, expressed his concern for Chairman Camp’s plan for tax reform: “Chairman Camp’s proposal is clearly at odds with America’s strong tradition of giving. Changes in his tax reform package could prove devastating to the vast majority of Jewish organizations and charities who rely on the charitable deduction for their fundraising efforts. We will work with our allies in Congress and across the nonprofit sector to prevent this proposal from being enacted.”
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Those who favor small government should support charitable contributions. The alternative to a big and powerful central state is a diffuse and democratic (small “d”) non-profit sector.
One should note that lower rates hurt charitable contributions. If you are in a 50% marginal bracket, every dollar you donate is in effect matched with a dollar from the government. At a 10% marginal rate, ever dollar you donate is matched by a dime. While high marginal rate hurt the economy as a whole, they are very good for encouraging contributions to charitable organizations.
Maybe camp needs a shiur on chesed
“If you are in a 50% marginal bracket, every dollar you donate is in effect matched with a dollar from the government. At a 10% marginal rate, ever dollar you donate is matched by a dime. While high marginal rate hurt the economy as a whole, they are very good for encouraging contributions to charitable organizations. ”
It is a little more complicated than that. At a 50% tax rate, $1 in contributions reduces your taxes by $0.50, not $1. At a 90% tax rate, $1 in contributions reduces your taxes by $0.90. We had that high a top rate during the Eisenhower years and the economy prospered — as did the not-for-profit sector. However today’s Republicans are primarily interested in helping increase the incomes of the wealthy, not helping not-for-profits. It seems ironic, but higher taxes on individuals could well result in less dependence on government.