Yet again–four out of four–President Obama’s proposed budget includes a reduction in the charitable giving incentive, decreasing the tax benefit that wealthier taxpayers can get for making charitable contributions. Of course, givers should give from a cheerful heart and because of a passion for a cause, and not just because their accountants assure them of the tax advantage of steering dollars to this or that nonprofit. Still: our federal government is huge and growing, whereas the nonprofit sector continues to be challenged by expanded needs and great difficulties raising funds.
The President’s budget also proposes to withdraw federal support (yet again) from the Washington DC school choice program that enables poor families to pick good private schools–despite the great demand for this alternative to the city’s public and charter schools, the ability of wealthier Washingtonians, including the President, to send their own children to private schools, and the significant positive outcomes of the DC school choice program.
At the state level, there was today yet another story about a city (Providence, R.I.) seeking a “voluntary” contribution from a nonprofit organization (Brown University)–a so-called PILOT contribution: “payment in lieu of taxes.” The university is wealthy and the town is suffering economically, so the envious glances toward tax-exempt properties and organizations is fully understandable. Yet there are very good and important reasons for that tax-exempt status, including promoting the vast good done by civil society and the great importance to our society of having organizations not controlled by government decide in their own diverse ways how best to respond to human need. Is pressuring the tax-exempt sector for “voluntary” payments really the only way that our cash-strapped governments can balance their budgets? Hard to believe.