How Government Suffocates Charity

We are a young, lower middle class family, and we give some 15-17 percent of our income to charity, or slightly less than we pay in taxes. Some goes to organizations that feed and provide healthcare to the poor. Private charities do this far more efficiently than the government, and as small-time donors we have the extra satisfaction of knowing our money goes to causes we are close to.

Charitable giving is a venerable American tradition: “Americans are the world’s most generous givers, donating more than $300 billion annually to a wide range of causes, with most of the gifts coming from individuals,” Nolan Finley wrote in the Detroit News this week. Yet the president wants to limit charitable deductions.

The pending January 2 tax hike—what everyone is calling the “fiscal cliff”—will mean we cannot afford half our usual charitable contributions next year. Once ObamaCare kicks in, I honestly don’t know if we can afford to give to charity at all, after our non-negotiable church tithes, because we pay most of our health expenses out of pocket, and we expect all health costs to rise.

Giving in a higher-tax world will mean for us no more trips to let the kids visit their faraway grandparents, more servings of beans and rice, and so forth. To me, this is a moral outrage, especially in light of the following graph explaining our government largely funds not critical programs, but subsidies to people who did not earn them.

Eberstadt Transfer Graph

According to Nicholas Eberstadt, from whose shocking little factbook this graph and information comes, the federal government spends two-thirds of its taxes on entitlements: welfare, food stamps, unemployment, Medicaid, Social Security and Medicare. In 2010 (latest figures), it transferred $7,200 for every man, woman and child in the country. That’s almost $29,000 per two-child family.

Our own family is certainly not getting that much, and we sure aren’t paying that much in taxes (nor could we afford to). But someday we or our children must—and in return for no new government services. No improved roads, no new school buildings, no available safety net spending, no extra F-35s to keep Iran-inspired madmen away from our shores. So to injustice, we add theft.

Why should our savings and hard work go to people who are not willing to also work and save? I feel like the Little Red Hen, except I don’t get to eat my own bread.

It’s mathematically impossible for the U.S. to keep paying more and more into entitlement programs on the shoulders of fewer and fewer contributing citizens. The more government punishes people who work hard and rewards others for not, the worse off our economy will become. Ultimately, unless we change course, more people will become poor and suffer.

  • Anonymous
    You are implying that you don’t have health insurance? The “paying out of pocket” thing sounds nice and romantic until you have an accident or get sick. Then the you are CRUSHED under hospital bills. An emergency outpatient surgery for an appendicitis recently cost me $20,000+. It was a 30min surgery, and not exactly optional. Who’s going to pay for that if you don’t have insurance? The Affordable Healthcare Act requires you to be covered. In my opinion it’s as necessary as car insurance, which is also mandatory.

    And to address your random, offhanded comment about Obama limiting charitable donations.

    First, his budget proposal would limit income tax charitable deductions to 28 percent for taxpayers at the HIGHEST marginal income tax rate, which currently receives a 35 percent tax write off. These are taxpayers whose annual income exceeds $250,000. That’s only a 7% difference, and does not affect your personal donations at all.

    Second, Nearly two-thirds of all the charitable gifts come from donors whose income are UNDER the $250,000 threshold.

    Third, if people are TRULY giving money out of charity, then the changes (from a moral standpoint) DO NOT MATTER AT ALL. If you only donate money to charity to get the 35% tax break, then fuck off (not speaking to you off course).

    Aaannnd fourth, please stop speaking in hyperbole. The government is not suffocating charity. If the US gives the most at 300 billion annually, then how is “suffocating” the right word?? Seriously… what?

    Personally I’m looking forward to this cliff. I hope we go over it. Say goodbye to 50% of the military budget! No more dead children from drone bombings! yay!

    -Mark

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