Peter Wehner of the National Review rails against Obama's plan to reduce the tax deduction available for charitable donations. First the facts: This only affects those making over $250K a year and it lowers their deduction from the 35% bracket to the 28% bracket - i.e. they can deduct $280 instead of $350 out of every $1000 donated.
Wehner's points are two-fold: One, this is bad for giving and, two, this somehow shows an intrusion of government into areas of our lives never before seen.
Let's take those in turn. Will a lower deduction for the top earners mean fewer deductions? Perhaps. The conventional wisdom is that giving will be down a lot this year anyway, both because of actual economic difficulties and because of the fear of giving up any money now while the future is uncertain. Given that environment, will there be any way to tell what effect the 7% drop in the deduction had? Not a chance. So it's a good theory, but I think the reduction is marginal.
Second, the claim that a lower tax deduction means greater government intervention into the lives of institutions and private persons is backwards. The whole idea of tax deductions is to create centralized, federal incentives for people to act. Thus, a high tax deduction - like the 100% charitable-giving deduction the govt put in place after 9/11 - is just as meddling as a lower deduction. Just the incentives change. A truly "republican" - Wehner is actually touting libertarianism - view would want nothing less than to do away with the deduction altogether. For a libertarian, any tax high enough to permit the federal government to raise and lower it to create a system of incentives is too high. The tax should be low enough that the money stays in the local communities to begin with to be spent or donated as people see fit.
And another thing. If you're going to make this silly argument, get it right. Wehner says that if we reduce the deduction from $350 to $280 per $1000 donated, that $70 will go to the government instead of the charity. Um. No. The charity gets $1000 either way. It is the taxpayer that has to pay taxes on an extra $70 in income at the end of the year. While that may change how much the taxpayer donates, that's totally up to him or her. It's not like the charity now has to carve out a portion of everyone's donations. If you can't get the simple math right Pete, stick to something a little fuzzier, eh?