Obama isn’t undermining charities

OBAMA ISN’T UNDERMINING CHARITIES…. Former Bush speechwriter Michael Gerson complains in his latest column, among other things, about President Obama undercutting charitable giving. As Gerson sees it, the White House will discourage donations to non-profits as part of some kind of ideological, big-government experiment: “This is a direct claim that the good done by government spending will be more important than the good done by the wealthy.”

David Brooks made a similar argument yesterday: “The U.S. has always had vibrant neighborhood associations. But in its very first budget, the Obama administration raises the cost of charitable giving. It punishes civic activism and expands state intervention.”

Given all the fuss, among these two and elsewhere, it’s probably worth noting that these concerns are unfounded.

President Obama’s proposal to limit the tax deduction for charitable contributions would affect only the top 1.2 percent of affluent U.S. households and, despite claims to the contrary, would reduce total charitable contributions by only 1.3 percent.

The President’s 2010 budget proposes to limit the tax subsidy for deductible expenses of the most affluent Americans and to use the additional revenue to help finance national health reform, including universal coverage. This proposal has been attacked on the grounds that it would lead to substantial reductions in charitable contributions and hit charities at a time when they face increased need and decreased contributions due to the recession. Careful examination indicates that these criticisms are greatly exaggerated or wrong.

If I only had a nickel for every time I’ve seen that phrase when applied to conservative talking points.

We’re talking about a small drop off affecting a small percentage of donors, which wouldn’t even take effect until 2011 (so it’s not as if charities would see fewer contributions during the recession). At the same time, the tax change would help finance a health care system that would necessarily “greatly reduce the burden on non-profit organizations.”

It’s a good move, handwringing notwithstanding.