Why Are President Obama And The Democrats Against Charity?

President Obama plans on limiting the tax break for charity deductions to 28%, penalizes those in the 33%, 35%, and soon to be 40% federal income tax brackets. What are President Obama and the Democrats against charities?

Since the overwhelming majority of charitable contributions come from households, and the overwhelming absolute dollar amount comes from those in the highest tax brackets, one can deduce charitable contributions at the margin will go down in 2011 and beyond.  Given this logical conclusion, why are Democrats and President Obama against helping charities through monetary means?

Currently, if you are in the 25% tax bracket, you can save 25% in taxes due to your charitable contributions i.e. donate $10,000, save $2,500 off your tax bill.  Meanwhile, there is equality among those who pay the highest taxes at 35%.  35% tax payers can equally save 35% in taxes from their donations.  So far, so good.

Due to massive government pork spending it's egregious that politicians now want to not only raise the highest marginal tax bracket from 35% to 40%, but also cut tax breaks on charitable contributions down to 28%!  That's two slaps in the faces of hard working Americans and a punch in the gut for those who need the most help.

Charities And Deductions

The essence of charity is to help someone selflessly. Charities help people in need. 

I should hope people's main purpose of giving is not for tax breaks.  It's kind of like going to the outlet mall where people go crazy buying more to save more. It makes no sense, but then again, a lot of people don't make a lot of sense.  So for starters, we are in agreement that most people give out of the goodness of their hearts.

Since some people do ascribe to the buy more, save more mentality, we can conclude there are also people who enjoy giving more to save more on taxes, which is not as crazy at all. 

The biggest risk for introducing asymmetric tax breaks is the tremendous backlash the wealthy will have against the government. Out of principle, there will be people who will simply refuse to donate at all because of the discrimination they face from the government. This is a very real worry which is starting to permeate already.

Give People The Power To Help Themselves

The Democrats are like people who love going out with bad boys just so they can try and fix them. They try to fix the unfix-able because for some reason, these people believe they are holier than these “troubled souls.” 

Despite getting burned time and time again, they continue to try and change people by expending a tremendous amount of wasted time.  Wake up.  Some guys don't want to be helped, so stop forcing yourself on them!

Care Not Cash” here in San Francisco is one such initiative where we've probably sunk more money into the program to try and fix homelessness, rather than just promote ways for the homeless to find jobs to make money for themselves. 

Charities Make A Difference

One organization, called “Street Beat” does exactly that.  They've created a self-funding newspaper written and produced by the homeless themselves.  Those who want to get involved go to HQ and pick out a bundle of the latest edition. The homeless then try and sell each paper for $1 dollar to passerbys, creating a win-win situation for everyone.

Instead of encouraging those with money to donate to organizations who specialize in helping others in various capacities, the government believes they are more efficient in helping the masses through their own government works programs. 

Clearly, there is a fundamental difference in how a large portion of the population sees things. Are you better at spending your own money, or is someone else better at spending your money for you?

Charities will be hurt by this new policy.

A Big Waste Of Money

Roughly $300 billion of charitable contributions happen each year.  It's estimated that with the enactment of this asymmetric policy against high income earners, there will be a decline of roughly 2%, or $6 billion in charitable contributions per annum. 

2% sounds quite conservative, but regardless of the amount, there will be a decline in charity exactly during a time when charities need the money the most!

On the flip side, the government estimates it will collect an extra $30 billion dollars a year to help fund the $1 trillion+ in deficit spending over the coming decade. Riiiight  Deficit spending is just going from bad to less bad. 

I happily estimate that $20 billion of that money will be used to line the pockets of corrupt politicians and corporations, $5 billion will be used on projects which won't get finished, while another $5 billion will be used to buy $100 thumbtacks and $500 staplers! We must save charities.

Spend More Responsibly

Massive deficit spending is clearly wrong because it puts a back-breaking burden on our children and financial system in general.  Eventually we have to pay back our debt. In the meantime, we are held hostage by foreigners. If we had no debt, we wouldn't have to keep on announcing discriminatory practices against certain hard working citizens.

It's so easy to say, “Well, if they're rich, they can afford it,” when you're a student or average income earner.  But if you were a recipient of charitable services or donations, the last thing you want is for the rich to be punished more.  It's not OK to punish people and make a new set of standards just because someone is rich.

What I fear is a massive backlash from the rich, who are the main contributors of charities in the first place. Clearly there will be a net decrease in charitable givings at the margin, so why is it that politicians are so against helping the poor and organizations who specialize in helping others? 

The poor have already suffered enough, let's not make them suffer some more. Let us protect our charities and give more to charities if we can.

It's now 2021 and charities need our help more than ever due to the global pandemic.

Related posts:

The Best Time To Retire May Be Under A Democratic President

The Amount Of Money Given To Charity Can Improve

Readers, why do you think President Obama is against helping the poor, but so pro helping the middle class? Do you think it's because the middle class are the majority of America and therefore are the majority of votes?

Do you think it's right or fair to impose different standards on giving for wealthy Americans, even though they account for the majority of all givings? How can we help charities?

Why not encourage wealthy Americans to give more by increasing the tax breaks?

Check out my top financial products page to help you save and grow your wealth.

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81 thoughts on “Why Are President Obama And The Democrats Against Charity?”

  1. FinancialBondage.org

    Obama and the dems are against anything that is America…. prosperity…. they are for bigger govt, higher taxes, more govt intrustion into our lives, etc. And this president is a socialist best I can tell… Higher taxes on the way.. watch your wallets.

    1. Thank goodness they didn’t raise taxes to 40% this past year while letting 45% of income earnings Americans pay nothing. Now that would have caused a HUGE revolt! Equality for all everyone!

  2. I agree and think this is what will happen and I’m about at that point personally.

    After all, why should I donate, since my taxes are going to the poor? Obama says
    so right?
    .-= Investor Junkie´s last blog ..When Should A Late Customer Get Cut Off? =-.

    1. Hi Amy, I think the government is telling us we don’t have to donate anymore because the government will take care of our donations for us. Let’s just hope the government does a good job, and not just spend to oblivion on things that are totally unrelated!

  3. I don’t know, Sam. I think that many people donate to charities because it makes them feel good about themselves and not because they want the tax benefit. It’s true that the tax benefits are a good incentive, but there are other reasons than “out of the goodness of their hearts.” While it may go down, I don’t think it will go down as much as you think. I donate to charity because it gets “junk” out of my apartment while also keeping it from landfills. Even without the tax benefit, I’d continue to donate. Likewise, I’ll continue to donate money to charities when I can. I do that in lieu of Christmas presents. The tax benefit just sweetens the deal.

    I tend to be a fiscally conservative Democrat, so I agree that many of our programs are “forced down people’s throats,” but I’ve also seen good come from them so I can’t knock them too hard. One of my coworkers lived on food stamps and stayed in a homeless shelter for a while in her early 20s when she got pregnant and dropped out of school. Now she’s got a steady job, a steady home for her 5-year-old daughter and is going back to school for a medical degree. Would she have made it without government assistance? I can’t say for sure either way. But I’m glad the system was there to help someone like her.
    .-= Red´s last blog ..People behind the clutter =-.

    1. Hi Red,

      Very good points, and thanks for sharing your story about your friend. There is NO DOUBT in my mind that many of our government works programs help people in need. Whether they are maximizing their efficiency, that is where I have my doubts.

      The debate presented here is whether further punishing the wealthy by taking away their tax breaks on charitable donations while increasing their marginal tax rates from 33% to 35%, and from 35% to 40% causes a reduction in charitable giving all things being equal. I believe the answer is YES. Given the answer is yes, it absolutely perplexes me why our government would want to take away charitable donations to people who need it most and fill the gov’t’s own coffers due to massive budget deficits.

      This is not a debate between Democrats and Republicans. This is a debate about government and what the heck they are thinking.


  4. As a new subscriber, I didn’t know this blog was full of conservative Republicans, but I think this post shows some real audacity to complain when you already have so much. (For full disclosure, I make somewhere between 80 K and 100 K so I’m in a mid to upper tax bracket.) Sure you point out the reality that people will donate less if they get less of a tax break, but that shows how greedy they are. I never determine how much I donate on the basis of how much I’ll be getting back. That’s just horrible. You’re all advocating giving the rich more in the form of rebates at the expense of giving money for programs to help the poor. Ironic, isn’t it? Why shouldn’t people who can afford to donate less get the same rebate on a donation as those who can afford to donate more? The other tax rule that irks me is the one that allows for a lower tax rate on capital gains from stocks. What a crock that is. Talk about lining the pockets of the rich. The middle class and poor get no benefit from this because they can’t afford to own any stock, (except for possibly within their 401K which isn’t impacted by this law).

    One other thing that many people forget is that private donations to local charities can never assure coverage for all the people that need help. What if food stamps were run by local churches? The states with the least money would be least able to help those that need help the most. And it may be true that conservatives give more in charity, but liberals don’t complain about taxes nearly as much. If you’re successful, it’s not all because of your efforts. There’s some luck involved, and much of it happened because of our country. Your success is often built on the backs of the hard working people who take care of menial or hard labor jobs at much lower salaries. They deserve to live comfortably and you owe it to support your country more than others for the success that our great nation has made possible for you.

    I know. Many of you conservative Republican types will say that if the rich pay more taxes, it will cause job loss and that if there are more tax cuts, more jobs would be created. That’s not true either. Even in good economic times, companies often cut jobs. Boards of directors and executives give each other pay raises and bonuses for laying people off to improve shareholder returns this quarter. In bad economic times, companies use the economy as an excuse to double or triple the work that the remaining employees have to do while laying off others. It’s funny how that leads to the need for more charity in our society.

    1. “The other tax rule that irks me is the one that allows for a lower tax rate on capital gains from stocks. What a crock that is. Talk about lining the pockets of the rich. The middle class and poor get no benefit from this because they can’t afford to own any stock”

      Let me pose this question to you.

      You do realize that at one point it was taxable income and then is taxed again for any profit made on the invested money right? At one point they had to earn the money. So you are in favor of punishing people who take risks and invest for the future? Most Americans who become wealthy do so in their lifetime and not via inheritance. So you are against people being able to rise up in the economic classes by hard work?

      By investing they are giving money to other business people to help improve their business (let’s use Apple as an example) So you are saying you are not for innovation and profit? Who do you think indirectly benefits from the investments? Working class people who may not directly invest in the stock market. They have a job because someone invested.

      The slower capital flows, the slower growth. Less investments equals less jobs. Less jobs equals more poor people.

      The classic statement “no one works for a poor person” is unfortunately true.

      Actually you confuse conservative Republican from Libertarian. I can’t speak for the others, but I’m for less tax and government involvement. The past ten years the Republicans have been anything been but that.

      The government really never “spreads the wealth”. Instead it centralizes power, and disburses money to who it’s chooses fit (ie crony capitalism)

      With this administration constantly stating “tax the rich”, “spread the wealth” and then on top of this remove tax deductions, it’s obvious they don’t think the rich worked hard to achieve. They must of stolen it or did something illegal or unethical right? Can I be the first to say what a load of crap! Most “rich” people are actually pretty ethical and giving. Yes there are always a few that ruin it for the others.
      .-= Investor Junkie´s last blog ..When Should A Late Customer Get Cut Off? =-.

    2. Thanks for your thoughts. I think you miss my point. If you re-read the 4th paragraph, we are all in agreement that people primarily give out of the goodness of their hearts, and not for their tax breaks. But, you’d have to be really naive that at the margin, donations from the rich won’t go down at the margin if the tax breaks for donating get cut.

      Hence, I and a lot of others feel that it is unfortunate for the poor and organizations who receive charities to face MORE hardship just because the current administration wants to consolidate power.

      80-100k/yr puts you in the 28% tax bracket. Would you be OK to suddenly paying 33%, while cutting your tax break down to 21%? If so, that’s great, and the government needs to create a program to identify people like you to pay more than their share. The other point is that there will be tons of people who would be unwilling, and therefore donate LESS to the poor. So forget about you and me, let’s focus on those who suffer the most.

      This is NOT a political post. This is a logic post. Just answer this one question: If the wealthy make up 80% of all charitable donations, and you raise their taxes while cutting their donatione tax breaks, do you think at the margin charitable contributions will go down? It’s really that simple.

      Lest you think the posts here are all conservative in nature, please read: https://www.financialsamurai.com/2010/03/22/insuring-the-uninsured-is-worth-it-health-care-bill/
      .-= admin´s last blog ..Riding Rocketships For Greater Success =-.

    3. Obama Tricked Me

      Why do you take things personally with the words such as “greedy” etc? Do you see any attacks in the post? Can’t you just see the logic? If you’re the one in charge of tax law, and you punish those who donate directly the most to charity, then charity contributions decline.

      I personally believe that charitable contributes decline by much more than 2%, all things being equal. Maybe it’ll decline by 10% because there will be so many people so pissed off at the government, they’ll just say fine, let the government donate everything then. The poor don’t need my help.

      1. I agree and think this is what will happen and I’m about at that point personally.

        After all, why should I donate, since my taxes are going to the poor? Obama says
        so right?
        .-= Investor Junkie´s last blog ..When Should A Late Customer Get Cut Off? =-.

  5. Just what we need: less for the poor.

    The government spends TRILLIONS bailing out corporations that are full of rich people, but when the time comes to help those in need, $6 billion makes a difference?

    People have lost focus of things: we’re still paying almost triple that amount a MONTH for two wars that really haven’t benefited anyone but large corporations.

    When will the needy be helped?
    .-= Smarter Spend´s last blog ..5 of the Best and Worst Stock Picks for Spring 2010 =-.

    1. I coulda sworn Bush and Obama promised to get us out of this war by now. Why do they continue to overpromise and under deliver? The war is sucking up so much of our gov’t revenue, just imagine if all of it was used to help those in need right here at home.

  6. We need to consider a flat tax so the government will stop using the tax code for social engineering and punative actions against specific industries and people groups. This proposal is just another attempt by a desparate treasury to raise revenues at the expense of a specific group currently weakened and unable to defend itself…

    The “gaming” (tax lawyers, shelters, etc) that goes on to avoid/minimize taxes is not productive activity – it’s parasitical and doesn’t raise our livings standards.
    .-= gn´s last blog ..Time Machine: Health Care in USA circa 2025 =-.

    1. Oh yes indeed. Flat tax = equality for all! No loop holes, it is what it is.

      Once we’ve got a flat tax, then we can discriminate against those things which do us harm i.e. cigarettes, 100% taxes on alcohol after your 3rd drink and beyond, sodas, etc.
      .-= admin´s last blog ..Riding Rocketships For Greater Success =-.

  7. Mr Credit Card

    Russia has a flat 13% income tax (yes – flat tax) and this increased tax collection from their old clunky system. So why not have a flat tax – no deductions and you do whatever you want with your money.
    .-= Mr Credit Card´s last blog ..Reward Travel And Credit Card News Today =-.

  8. I like this post. Now it’s not just the rich that donate to charities, but let’s face it – it’s the wealthy that give the biggest chunks and they should be able to write off as much as anyone else as they worked their buns off to earn that money in the first place.

    Now slightly off topic, I read recently that the US govt is giving over a billion dollars to Haiti. Now, I’m not against helping Haiti I’m just using this as an example, I really don’t understand how we can keep giving money away outside the US when our country itself is in a mess. Yes a billion is a drop in the bucket of our debt monstrosity, but that’s still a LOT of money. Shouldn’t we follow the instructions they say on the airplane “put your oxygen mask on first before helping others” ??

  9. What about giving to charity and not getting a tax break? I did this for many many years before I was able to itemize. Getting a tax deduction should not be the reason you give to charity!

    Instead of giving the tax break at the top marginal rate – why not give it at the lowest marginal rate – then for every dollar everyone gives – they will get the same tax deduction.

    Furthermore, why do we give a tax deduction for giving money to charity? I’m all for simplifying the tax code and doing away with the tax deduction for charitable giving sounds like a great place to start.

    1. But you are being given a tax break even if you don’t itemize, and it’s called your standard deduction. The standard deduction simply means that if you fall below a certain threshold – for 2009, $5,700 single, $11,400 married jointly – you get a tax break presumably based on an estimate of such expenses as your charitable contributions, your state/local taxes, possibly even your mortgage interest. In fact, you’d get that same tax break if you lived in a tax-free state, rented, and didn’t give a dime to charity. All that happens when you exceed the threshold is that you can now itemize your amounts. That’s close to $6K at a minimum that the lousy, stinking federal government is excluding from tax for any non-dependent who files a return, and the amount goes up annually.

      But there are a lot of ins and outs to charitable deductions that I don’t see mentioned in most of the above comments. For example there’s a phaseout on Schedule A deductions above a certain AGI that would certainly affect wealthy taxpayers, although this is mitigated somewhat by provisions that let you carry over the excess for the next five years.

      Then, according to the AICPA, taxpayers with large charitable contributions that exceed their AGI can use planned-giving techniques like charitable gift annuities or charitable remainder trusts.

      All I’m saying is that there are a lot of tax planning strategies available to the wealthy that need to be evaluated before we run around screaming doom and gloom at Obama.

    2. Agreed. As stated in my 4th paragraph from the top, most people aren’t giving due tax breaks. They are giving b/c they believe in the cause of the organization.

      I like your idea of everybody only getting a 15% deduction. At least make it EQUAL. It’s more palatable than raising taxes from 35% to 40%, and then CUTTING the deduction from 35% down to 28%.
      .-= admin´s last blog ..The Elegance Of Failure =-.

  10. All I can say I can’t wait till 2011. It’s gonna be fun fun fun. Double dip recession anyone?
    .-= Investor Junkie´s last blog ..When Should A Late Customer Get Cut Off? =-.

  11. Jeffrey Sikes

    It makes sense that Democrats/Liberals are against charity because Republicans/Conservatives donate on average 30% more to charity than them. That must really irk Democrats, and hence, they want to enact laws to punish Republicans from giving to much and making them look bad.

    With more money in the pockets of Democratic politicians, then THEY can claim the power and tell people how much they are giving.

    We should create tax incentives for people to donate more, not take away incentives to deter people from giving.

    What is Obama and the gov’t thinking I don’t know.

  12. Basically stated this in my blog post a few days ago:

    Wealthy will donate less because the tax increases are a form of “donations”.
    .-= Investor Junkie´s last blog ..When Should A Late Customer Get Cut Off? =-.

  13. I’m with Debt Hawk…and I quote him, “Liberals are not against charity, but they think that role should only be played by Government and not individuals.”

    Three big problems with Government (not individuals) controlling charity:
    1. The recipients think it is owed to them. There is little or no gratitude. People appreciate gifts from individuals or charitable organizations more than from government.
    2. Once a government bureaucracy is established to distribute any funding, it is nearly impossible to un-establish it.
    3. Individuals (charitable organizations) can be more flexible. If they don’t want to give to someone who is poor and lazy, they simply don’t. Government can’t figure that out.
    .-= Joe Plemon´s last blog ..The New Health Care Bill: A Prescription for Diminished Health Care =-.

    1. @ Joe Plemon,

      1- I disagree
      2 – Good!
      3 – Create accountability standards that prohibit people from receiving benefits if they’re not doing their part.
      .-= Honey´s last blog ..We’re An Editor’s Best On SexForums.com. BOOM. =-.

      1. @Honey

        Related to #1 show history where this isn’t true? They don’t call it “entitlement” for
        .-= Investor Junkie´s last blog ..When Should A Late Customer Get Cut Off? =-.

  14. I am opposed to charitable giving being a tax writeoff at all. I think they should raise the tax on the wealthy by even more and have the gov’t administer all the programs.
    .-= Honey´s last blog ..We’re An Editor’s Best On SexForums.com. BOOM. =-.

    1. Jeffrey Sikes

      You want to institutionalize charity by wiping out ALL tax deducations for charity? Why would you be so cruel to take away 10s of billions of dollars to people who need the money?

      I’m impressed you are so bullish on the gov’ts ability to handle poverty. They are doing a great job so far, NOT.

      1. Well the reason I don’t think it should be a writeoff is because I don’t really agree with charity. My boyfriend and I only donate to animal rights’ organizations. We refuse to donate to anything that benefits people. We’re vegetarian atheists, so this aligns with our values.
        .-= Honey´s last blog ..We’re An Editor’s Best On SexForums.com. BOOM. =-.

        1. I suppose I should clarify – I don’t believe in charities that benefit people. Animal charities are all right because most of the horrible things that they deal with have been done to them, and because they are incapable of doing anything to improve their situation. People have lots of options. I suppose I do donate things to Goodwill, but that’s mostly to be environmentally friendly about disposing of things I no longer need. And I’ve never claimed a single charitable donation on my taxes.
          .-= Honey´s last blog ..We’re An Editor’s Best On SexForums.com. BOOM. =-.

        2. Jeffrey Sikes

          You don’t agree with charity but you donate to animal rights organizations? Isn’t that charity? You’re not being consistent or making any sense.

          Surprising your values don’t include helping others.

      2. I am also okay with donating to organizations devoted to curing diseases – provided that the disease is not a result of a lifestyle choice with consequences the person would have known about going in.
        .-= Honey´s last blog ..We’re An Editor’s Best On SexForums.com. BOOM. =-.

    2. You want to raise taxes on the wealth even more while completely wiping out all tax breaks for giving? You know billions of dollars will be lost to charity as a result right?

      The gov’t is not as efficient as you and me in spending our own money. That, I can guarantee.

      How would you feel if the gov’t raised your tuition debt of $100,000 for your PhD to 20% all of a sudden%? Would you be OK with that? I don’t think so.

      1. I would absolutely be all right with raising the cost of my tuition debt by 20% if everyone who received charity had to pay back the worth of their aid plus 20% as well. Fair’s fair.
        .-= Honey´s last blog ..We’re An Editor’s Best On SexForums.com. BOOM. =-.

        1. That might’ve affected my decision about whether to get a PhD in the first place, since I only make $40K/year, but if I did decide to go on and get the PhD knowing that, it wouldn’t bother me because I made the choice.
          .-= Honey´s last blog ..We’re An Editor’s Best On SexForums.com. BOOM. =-.

          1. Sounds good. This is what we the people need to tap into more of. We need to identify people who are willing to pay more money than they need to, to subsidize the rest of us.

            Do you think if the gov’t were to create a program and ask for volunteers to pay a higher amount of taxes than others, we’d be able to raise enough money to redistribute to those who won’t be paying higher amounts? Honest question.

            BTW, congrats on your Editor’s Best choice!

            Thanks, Sam

        2. “Do you think if the gov’t were to create a program and ask for volunteers to pay a higher amount of taxes than others, we’d be able to raise enough money to redistribute to those who won’t be paying higher amounts?”

          Sure – it’s called a flat tax, Sam! Ha. I guess we agree to disagree on this one. Thanks for the congrats! I like this blog – it has a different twist than the other PF blogs out there, which are starting to bore me. I can only read about mutual funds and whether or not people should refinance so many times – this blog actually makes me think!
          .-= Honey´s last blog ..We’re An Editor’s Best On SexForums.com. BOOM. =-.

        3. Cool. Let’s keep things apples to apples then. How about if the government decided that all those with PhDs such as yourself had to pay 20% interest on your student loan of 100K b/c they assume you will make more than others, while those with only Master’s degrees only had to pay 5%, and those with Bachelor’s pay 0%?

          Still OK? B/c that’s exactly what our current system is like.

  15. There are a lot of comments here but I thought I would add my .002 cents. It sounds like a straw man defense when you say Obama is against helping the poor. Expanding the middle class’s ability to create wealth and generate jobs will give more room for those that are poor now to gain income and wealth. Taking some of the tax burden off the middle class and onto the wealthiest is a stellar idea. I also think Obama is gaining more tax income to pay off the debt and afford the social programs. health care is generated to help the middle class and the poor.

    I would like to see more relief for charitable giving, but my main passion is to see the government become more efficient and the resources taken in taxes to be used to the fullest extent. I feel too many politicians are trying to get re-elected instead of make the best decisions. I feel obama is closer to trying to make the best decisions and not just get re-elected. Future will tell of course. But when running a huge deficit, you either a) add income or b) lower expenses. I expect the government to do both until we have a balanced budget.
    .-= Ted´s last blog ..Thank you for your advice… not! =-.

    1. @Ted
      A really good point – if less people are in need of charity because of the government being successful here, that would be great. I agree 100% on efficiency too.

    2. You expect the government to be able to b) lower expenses? Come on now, seriously? The government is in it for themselves and their constituencies. They will spend and spend and spend and leave the problem to the NEXT regime!

      You can’t argue with the logic that if you punish someone from doing something, they won’t do it as often anymore! Who is doing the punishing? Obama and the democrats are punishing people in the highest tax bracket by reducing their incentives. Therefore, it is logical to conclude that the democrats wish to reduce charitable givings which frankly disappoints me greatly!
      .-= admin´s last blog ..How To Apologize For An Error? Martyr Yourself! =-.

  16. Credit Card Chaser

    DebtHawk is exactly right. In the liberal/progressive mindset the goal is for the government to be the ultimate decider in who gets what.

    The utopia for Obama is to have all power consolidated in one place – the government – with him at the helm so that he can dictate exactly how he thinks thinks all resources should be allocated.

    It has never been about helping the people (although I am sure that Obama and many others delude themselves into thinking it is) – it’s all about a massive power grab.
    .-= Credit Card Chaser´s last blog ..Are Credit Card Concierge Services Worth the Cost? =-.

    1. What’s the saying…. “Absolute Power Corrupts Absolutely”? It’ll be interesting to see if Obama really doesn’t care about getting re-elected for his 2nd term or not. I bet he will care dearly. Power is addicting!

  17. Good point Debt Hawk. You don’t get into politics to get rich (President only makes what, $400k/yr?), you get into politics so you can amass POWER, and laugh like this: “Bah, hah, ha, ha, mwa, ha, ha, ha” in your head when you see lesser beings.

  18. My father owns a non-profit repertory theater in New York. Much of his capital for improving his theater, sponsoring new playwrights, and helping to foster young actors comes from donations. His donations this past year have already decreased due to the economy. If the Obama administration reduces the amount of donations people can write off, I’m sure his theater will feel the brunt of that as well. Some people may think funding the arts is a waste of time, but some brilliant minds have been nurtured through art.
    .-= Little House´s last blog ..Why Don’t I Qualify for a Roth IRA? =-.

    1. THANK YOU for providing a real life example of the effects disincentivizing donors have on real people with real projects.

      I dont think theatre and the arts is a waste at all. Life would be empty without the arts. Your comment is a good response to Geek’s comment who questions when charities are ever not in need.

      Clearly, the economic downturn has hurt organizations who depend on donations, and punishing donors durig this time is the exact WRONG thing to do.
      .-= admin´s last blog ..Punctuality Breeds Credibility – Stop Being Late! =-.

      1. I honestly know it’s worse now but I have very high skepticism with a very low tolerance for “the sky is falling!” Even if it is falling, all the time.
        I realise that for nonprofits the rules aren’t always the same as for-profit companies. Being held together with duct tape and living from donation to donation happens more frequently. Money held in reserve for a rainy day is less (because you could do good with that money now) etc.

        My guess is that this will suck for a while, people will adjust, and things will go on pretty similarly to before.

  19. Brad Chaffee

    Democrats donate less overall, and I think it is because of what others stated above. they want the money to funnel through them. The book: “Who Really Cares: America’s Charity Divide—Who Gives, Who Doesn’t, and Why It Matters”, gives a wonderful, yet controversial look at this issue. I one time read that Dick Cheney (not one of my favorite politicians), gave 50% of his income. People who declare conservatives, or anyone that is not “Liberal Progressive” (if you can call it progressive), as people who lack compassion for others are seriously confused and misguided.

    Everything the Obama administration id doing is about POWER and not about helping the middle class or the poor. That’s why they are forcing their control upon us, while the loyal Obama allegiance blindly believe. This has to be the worst administration certainly in my lifetime.

    The Money Reasons who said the Tea Party movement might have validity. The Tea Party movement has been portrayed as monsters on TV by the liberal media. I have been a participant at many Tea Party events and what I have seen is not a bunch of racist homophobes who just want to cause trouble, I have seen people who are sick of what our country is turning into. The Government was never supposed to be this big, and that’s the bottom line. It is people who believe in the Constitution and what it says. Clearly, Liberals and Democrats do not like the document which is why they spit on it every chance they get.
    .-= Brad Chaffee´s last blog ..Manage Your Money Grand Prize Giveaway & Questionnaire =-.

    1. I disagree. If charities “worked” then the richest 10% would donate 80% of all charitable contributions. I think the fact that they pay more as a % of taxes is an indication that charity would not get as much $ as the government is able to.

      Just remember: your compensation is most likely already adjusted for taxes due to market forces. Don’t worry about taxes so much!

      1. Jeffrey Sikes

        Geek – It’s OK to tell folks not to worry about taxes so much if you aren’t paying a lot of taxes. That’s just like me saying to women “don’t worry about pregnancy, it’s painless and risk free”! Not quite, but you get the picture.

        1. I’m saying don’t worry about taxes *so much* because you are most likely already compensated to make up for them.
          By all means worry about them. Heck, I have some pretty “mean” beliefs about the whole thing, and I rarely donate to charities benefiting my fellow humans because of them.
          But take into account that if you earn 100k, if you didn’t pay taxes on that 100k, it would only be worth what 100k-tax is (on average) today.

    2. Hear Hear about the MSM making Tea Party into something it’s not! It about:
      – The increase of government and spending
      – The increase of our national debt
      – The increase of our taxes
      .-= Investor Junkie´s last blog ..When Should A Late Customer Get Cut Off? =-.

  20. When it comes to charity the money should go to those that need it the most… In today’s world Obama has simply used his superior education and higher intelligence to enlighten us that it is he and the federal government that deserves our charity more than the orphan kids and single parents.
    .-= LeanLifeCoach´s last blog ..What Sacrifices Are You Willing To Make? =-.

  21. Sam, despite a controversial title, your analysis is very logical and makes a lot of sense.

    The top 10% wealthy contribute over 70% of all charitable contributions, just like the top 10% contribute over 80% of all tax revenue. To take reduce the wealthy tax breaks for charity donations will obviously result in a decline in charitable contributions.

    I don’t understand how people can’t understand this argument? Using the proceeds to pay for the deficit is just going from more negative to less negative. You’re not going forward b/c you’re in debt, the country is in debt.

  22. “there will be a decline in charity exactly during a time when charities need the money the most”

    I have never heard of a time when charities DONT need money the most.
    Other than that this is an ok post, but what is with all the charity posting around April 1st?

    1. That’s really an easy one. Taxes are due April 10th, which basically creates the argument that cutting tax breaks for the wealthy donors will impact charities more than a 2% decline.

      1. Bingo. It’s b/c of tax season. So more people perhaps do donate due to tax write-offs than originally expected.

        Geek, non-profit organizations are like companies. They are suffering from a lack of revenue (donations), and are going under left and right. They go under, the people they serve go under.

        It’s pretty dire straits now if you talk to anybody in the non-profit industry.

  23. If I asked, “Why do you think President Obama is against education, healthcare, and the arts, but so pro helping the poor?” would that sound a little ridiculous to you and your readers?

    I’m guessing yes, but that would actually be more accurate. After reading your post, I decided to do what I often do when reading claims that are presented without accompanying facts: attempt to find out what the facts are myself. Here’s what I found:

    Look especially at pages 19 & on in this study analyzing giving focused on meeting the needs of the poor:

    “These data indicate that average-income households ( contribute substantially to religion, combined purpose charities, to help meet basic needs, and “other” types of recipients. On the other end of the spectrum, wealthy and very wealthy households ($200,000 or greater) contribute substantially to education, health, religion, the arts, and “other” types of recipients.”      
    .-= Jackie´s last blog ..What’s the Best Advice That You Just Didn’t Take? =-.

    1. Religious groups usually help out with basic needs. But I found this linke which was kind of interesting:

      OVER $126,000,000,000 in advanced Charitable Planning (and that doesn’t even count private foundations). Yup, that is 126 BILLION in trusts that benefit charitable orginziations that are usually only used by wealthy (however you want to define the word) individuals.

      Think about how many new ones will be created when this goes through
      .-= Evan´s last blog ..Using Dividend Stocks to Pay for Your Coffee =-.

    2. Thanks Jackie. From your same website, it says that Conservatives donate on average 30% more than liberals. Maybe that’s why liberals are so against donating to charity? It perplexes me.

      I think my logic is sound that if you punish those for doing something, they will do less of it no?

      Check it out. Thanks for your thoughts.

      .-= admin´s last blog ..How To Apologize For An Error? Martyr Yourself! =-.

      1. I’ve seen the stats that Conservatives and Liberals of the same income level
        Conservatives donate MUCH more (that 30% stat)

        It can be surmised into two things:
        1. Liberals feel it’s the govt purpose to help
        2. Liberals don’t like giving up their money (could I even say selfish?)

        Maybe I should act like a Liberal?
        .-= Investor Junkie´s last blog ..When Should A Late Customer Get Cut Off? =-.

  24. You’ve got to assume this sort of thing happens because left-wing politicians want the money to go through them and their tax-funded programs, especially when money is tight.

    Looking at at the positive side, perhaps there’s a case for saying economies of scale help when Government fills these roles, or that they don’t overly target ‘pleasant’ charities such as Save the Furry Animals or More Cash for Cuddly Kids, as opposed to dementia in the old or delousing housing projects.

    The more cynical take is that if the money goes from the rich to the poor, the poor benefit and the rich feel good, whereas if the money goes from the rich to the poor via politicians, the poor and the politicians and benefit, the latter in the form of more votes just for spending our money.

    The truth is probably somewhere in between.

    1. Monevator, very well said and logical. I like how you presented the positive and negative sides. Although, there’s nothing wrong with the Society To Save Furry Animals! lol

  25. Notwithstanding Mossy’s anger towards a particular program, Sam your points are amazing. I think people consistently forget who funds this Country and as you point out Charities.

    There seems to be a growing anti-wealth/anti-high income movement in this country, but I think that blame should be on the wasteful government NOT high income earners.
    .-= Evan´s last blog ..Using Dividend Stocks to Pay for Your Coffee =-.

    1. Wasteful government indeed……. the irony is that the more the anti-wealth movement builds steam, the less charitable donations will go to the poor.

      Let’s create tax incentives to allow people to donate more, not disincentives.

  26. Money Reasons

    What happened to “all men are created equal”?

    It’s sad and embarrassing to have the new tax law that are coming out. Perhaps that Tea party thing going around has some validity afterall… The liberal Democrats aren’t even trying to make fair and just laws anymore… They can just force everything through…

    Here’s the deal people, for those of us that are rising or trying to rise in the new worth, we might not ever be able to join the other wealth people because the roads to them have been blown up or at least blocked by the current government.

    As for charity, I wouldn’t be surprised if the contributions by the wealth decrease by more that 2%. After all, if I were them, I wouldn’t feel all that charitable… In fact, I’d feel down right angry! Class warefare doesn’t bring our economy together!

    If you have some wealth, perhaps you should really start to get involved politically! Because the way things are going, if the current government stays in control… You might not be wealthy much longer! I can see a future step for the liberals to create a wealth tax and other anti-capitalism policies and laws!

    November is so far away… Too much time for the liberals to lie and try and brainwash us again. I say this because I fell for the lies and voted in Pres. Obama…

    Lol, I remember that scalpel comment that Pres. Obama made about reducing government spending on programs that don’t work… Apparantly, that scalpel made by Mattel…
    .-= Money Reasons´s last blog ..MoneyReasons Weekly Cache 2010, Mar 28 =-.

    1. I wouldn’t be surprised if charity from the wealthy didn’t decrease by 2% either! Class warfare and discrimination is so bad, I don’t understand why more people don’t voice up. Oh yeah, it’s b/c most people won’t get hit, so if it doesn’t matter to them, it doesn’t matter.

      You’re right, there IS a cap on people’s dreams and desires to attain wealth in America. The hope is that most people don’t aspire too much, and don’t reach their potential anyway, so there will be no uprising.

      Scalpel made by Mattel, lol.
      .-= admin´s last blog ..How To Apologize For An Error? Martyr Yourself! =-.

  27. I lived in San Francisco almost all my life so I know all about “Care Not Cash” and “Street Sheet”. You’ve basically totally misread the purpose of these programs.

    Care not Cash is not to help the homeless. It’s to get them off the streets. The residents of San Francisco are sick of panhandlers from all across the country heading to San Francisco for the weather and government benefits. If we’re going to spend money, we might as well spend money to get them out of sight and out of mind. Sorry if this sounds bitter but after 30+ years of aggressive panhandlersl wandering the streets of San Francisco (after Governor Reagan shut down the state mental institutions), this is turning out to be the best solution.

    Street Sheet simply gives the homeless money to buy more alcohol and drugs. Anybody who thinks paying $1 to buy this newspaper is a step for the seller off the street is totally naive. The majority of the homeless in San Francisco are not down-on-their-luck Americans — the majority are drug addicts and mentally ill. Every dollar you spend on this paper is more human crap, condoms and needles littered across the streets in your neighborhood.

    1. I understand the purposes, and I look at the results.

      Re-read your comment. Care Not Cash you say is b/c THE RESIDENTS are sick of panhandlers, and you don’t like aggressive pandhandlers wandering the streets (your streets) of SF. Think about that mentality for a while. The idea of trying to care for those who you think are not down on their luck (I call being addicted to drugs or being mentally ill a hard place to be) has gone totally OUT the window. Instead, you’re focusing on yourself and others who are bothered by panhandlers.

      I spoken to many Street Sheet people, and I will 10,000% guarantee you that a majority of them want to benefit themselves, and feel a sense of pride by selling their community run newspapers instead of just beg with nothing. I’ve given them portions of my lunch, and they happily oblige and don’t turn it away just b/c they can’t exchange food for drugs. If you give people a ways to help themselves, people will find a way. People will always find away.

      Thanks for sharing your thoughts.

      .-= admin´s last blog ..The Ripples OF Giving =-.

      1. Ahem, just because you talked to a few Street Sheet sellers who say all the right things does not mean they were telling you the truth. Panhandlers are as just as slick as car salesmen. There was one story in the San Francisco Chronicle about a homeless who bought a new Harley Davidson for $16K entirely from begging. We’re talking super salesmen here except they work the streets.

        *Results* are important. Theories are not. Over 30 years, we’ve had conservative mayors and liberal mayors and everything has been tried. Charity has not gotten the homeless off the street. Cash benefits have not gotten homeless off the street. Street Sheet has not gotten homeless off the street. Crackdowns have not gotten homeless off the street. At least under Care Not Cash — those who want a roof over their heads can get one. They can get counselling and job training if they want to. It gets the 80% off who want to be off. The remaining 20% hardcore simply want to remain homeless.

        The rest of you armchair quarterbacks who haven’t had to deal with the problem are just making guesses on how you think the world would work
        .-= MossySF´s last blog ..Vacation but don’t invest in Europe =-.

        1. No system is perfect, and I actually am glad there is a Care Not Cash system in place. It’s better than nothing and doing something. It’s not the perfect analogy for giving money and providing services.

          But, what I will defend is Street Beat completely. Those guys stand on the street the morning i get in to work to the evening i leave, trying to sell the papers their own community have created. I haven’t just talked to one of them, I’ve talked to a dozen of them. They’ve shared with me their stories. I don’ think enough people listen. Too many people talk, like i’m talking here.

          You have every right to continue thinking about yourself and how getting rid of the panhandlers will help your way of life.


    2. I live in SF too. There continue to be a bountiful amount of panhandlers here in The Mission, Van Ness cooridor, and downtown.

      Sam makes a point about you focusing on helping yourself, rather than helping them. There’s a fundamental difference here.

      1. Shrug … I don’t live in San Francisco any more so it’s no longer my business what is being done. It’s just an observation that the idealistic theories have been tried and failed. I’m being realistic and if that means I sound cold-blooded, it is what it is.

        And to be honest, why should *I* have to focus on helping the homeless? I am good at computers, not social services. Hence, my focus should be on making money so I can either pay more taxes and/or make more donations. If I give away money but my requirement is they get off the streets and into housing, they have the right to turn the money down. What’s that saying about beggars and choosers?
        .-= MossySF´s last blog ..Vacation but don’t invest in Europe =-.

        1. Again, you are focusing on your business, and what you want, and not what others want.

          You don’t have to focus on helping the homeless, since that’s not a requirement or your right. Which is why the government taking money away from organizations who specialize in helping others is a damn shame.

    3. Mossy it doesn’t seem like you’ve ever spoken to any of the homeless and street sheet sellers in SF. I’ve been all over the city and have seen many homeless people for years and years. It’s easy to spot which ones are on drugs, drunk, or crazy, and which ones are really down on their luck and just trying to get enough money for their next meal. I’ve never seen a fake or loadie bum selling street sheet. The ones that sell that paper are really trying to do better for themselves.

  28. Mrs. Not Made of Money

    I’m with TheDebtHawk on this. It’s not that they don’t want to help the poor, but the libs want the power to decide who gets “charity” and for what reasons.
    .-= Mrs. Not Made of Money´s last blog ..Frugal Tips For Saving Money When Dining Out =-.

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