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Traditionally the US government has encouraged charity by exempting donated Dollars from income tax. Yet in February the Obama administration has proposed to reduce the charitable tax deduction for the highest two income brackets by as much as 30%. The economist Martin Feldstein has calculated “thatPresident Obama’s proposal to limit the tax deductibility of charitable contributions would effectively transfer more than $7 billion a year from the nation’s charitable institutions to the federal government”.  Feldstein has also estimated the impact of the tax increase on the overall amount of charitable spending. He suggests that spending could decrease by 10%.

Increasing tax on philantropy is one thing. But there are other assaults on charitable organizations. David Billet writes in Commentary Magazine:

“The most notable campaign against the philanthropic status quo has been waged by the California-based Greenlining Institute, a nonprofit that seeks greater “racial and economic justice” by attempting to force greater minority representation in government, commerce, and higher education, mostly by publicly shaming or suing companies into doing the right thing… After a Greenlining study found that a mere 3 percent of private grant money in California went to minority-led causes, the group waged a concerted campaign on behalf of state legislation to require foundations with assets over $250 million to disclose the race, gender, and ethnicity of board members, staff, business contacts, and individual grantees (at one point sexual orientation was also included), and to report the amount and percentage of grants to organizations in which 50 percent or more of board members and staff were minorities.”

It seems that there is a line of thinking in the government that charitable tasks are the responsibility of the government and that private organizations have no right to play a role in the area of social justice. At least, the role of private organizations, charities and philantropic societies must be controlled and regulated by the government. Tax policy is only one means to do that.

What do you think? Should the government monitor charities more closely and tax the wealthy contributors more heavily? Comments are open.