The February 26, 2009, edition of the online website of the Wall Street contained an article about President Obama’s proposed budget and the increased taxes included in it. One statement from the Journal concerned charitable deductions: “The tax increases would raise an estimated $318 billion over 10 years by reducing the value of such longstanding deductions as mortgage interest and charitable contributions for people in the highest tax brackets.”
As innocuous as that sounds, the consequences of reducing charitable giving could be catastrophic for America’s churches. Charitable giving is at the heart of the support system for virtually every church. As someone who served a relatively small congregation for many years, I know how tight money can be. As a part-time pastor in a larger church now, I have seen the same thing as the congregation’s giving generally lags behind the budget and the needs. Any change in the deductions for charitable giving can only hurt the religious community. I’m not even going to get into the impact on other groups that depend on generous donors.
Let me give one small example of a program that could be affected by a limit on charitable giving. Our church has an outreach to the homeless in our part of Minneapolis. Every Sunday morning, we serve a breakfast for a couple of dozen homeless people. After worship is over, a group of people take sack lunches out into the community looking for homeless people. The program is funded through a combination of church funds and individual donations.
By the way, I am not naïve enough to believe that limitations on charitable deductions by high income people is the end of the matter. As government programs demand more money, the limitations will reach down to lower income brackets.
Is the President deliberately attacking the church? Is this an intended consequence of changing the tax law? Is it an unintended consequences of politicians so intent on raising money for their own agenda that they didn’t consider who might be affected by the change? Is there something more at work here than merely raising more money?
Radio commentator Hugh Hewitt sees a more sinister motive behind the change. He is quoted on the There’s My Two Cents website as saying that President Obama is engaged in a “naked attempt to shrink the private, not-for-profit sector so that government is obliged to fill its place.”
If so, it’s just one more step in a process that has long been at work in the United States. The New Deal under Franklin Roosevelt and The War Against Poverty under Lyndon Johnson are only two of the many programs that moved the government into areas of social life that formerly were seen to be the province of charitable groups including the church. Even those programs-and others like them-had (and still have) an impact on charitable groups. Not only are people still asked to give to groups such as the Salvation Arm and their local church, but they are also paying higher taxes in order to support the government programs. Something has to give, but, apparently, not for a while, given the proposed budget and the limitations on giving.
And does anyone really believe that government can be more efficient and cost-effective in dealing with societal problems than the church and other non-governmental organizations? The government’s track record is not very encouraging.
Let me conclude with some more words from Hugh Hewitt from the There’s My Two Cents website: “This is one of the most radical, and cunning, attempts to upend a basic feature of the American way of life, and it must be defeated.”