Conservative special pleading on taxes: charitable giving

I don’t know whether or not we’ll be diving over the fiscal “cliff” in the next few days, but one of the discussions that has intrigued me in recent weeks has been the debate over whether or not Congress should preserve the tax deduction for charitable giving. This deduction will expire should Congress do nothing during the next four days, and it could also expire or, more likely, be modified, if Congress does take action.

Conservatives and Republicans love to claim that their policies are more fiscally responsible than are those of the liberals and the Democrats. Conservatives want to reign in spending to reflect tax revenue, they point out, while the Democrats are committed to the unsustainable welfare state. Liberals, on the other hand, note that the Republicans talk the talk but never actually make the hard decisions to cut spending. What recent Republican administration ever maintained a balanced budget?

Part of the problem, of course, is that while virtually everyone agrees that the federal deficit has to be reduced, no one wants to see their own pet projects abandoned. We can all outline a series of programs and initiatives that we think should be jettisoned, but there is no shortage of organizations and lobby groups to explain to us why such reductions in spending would be detrimental to the country. Similarly, when others outline their lists, we are ready with our defense of our own favorite policies.

Thus we have the phenomena of staunch conservatives attacking President Obama and the Democrats for refusing to make hard decisions when it comes to spending cuts, while at the same time adamantly insisting that the deduction for charitable giving has to be maintained. So for instance, Richard Land, outgoing president of the Southern Baptist Convention’s Ethics and Religious Liberty Commission, claims that the expiration of the deduction is a “draconian threat to the religious and non-religious charities they [Americans] cherish.”

Land’s concern is about a measure not aimed at charitable deductions per se, but simply attempting to limit the amount of deductions claimable by high earners. In fact, he insists, “By all means we should reduce tax loop holes and extravagant personal deductions.”

But not this loop hole and not this deduction.

At a time of a seemingly ever-expanding, but financially strapped, federal government, why would that government seek to weaken and eviscerate the civil society nonprofits so necessary to act as a gentle buffer between government and individual citizens in need?

The proposal to further cap charitable deductions in the federal tax code is a threat aimed like a dagger at the heart of America’s charitable nonprofit entities, secular and religious. It will weaken most, kill many, and harm all.

Land tends to give in to temptations to escalate his rhetoric in situations like these (he claimed a few months ago that the 2012 election was the most significant in his lifetime). The Christian Examiner reports,

The idea of capping the charitable deduction “is as serious a threat to religious organizations as anything the federal government has done in recent decades,” said Richard Land, president of the Ethics & Religious Liberty Commission (ERLC).

As serious as anything? Even the contraception mandate? Even the attempt by the Equal Employment Opportunity Commission to curtail the “ministerial exception”?

I agree with Land that government needs to foster and protect a strong civil society. I’m not convinced that the survival of such civil society depends on selective treatment from a federal government reeling from its inability to say no to special interests. It is simply not enough to make a good argument that federal support for a particular program or tax break benefits the country and is financially beneficial in the long run. Such arguments can be made about virtually every program or policy. If we have any hope of establishing a just, simple tax code, however, such arguments need to be resisted. Conservatives need to be as ruthless with their own favorite policies as they are with those of the left. They certainly don’t need to be playing the religion card.

In the Washington Post Ken Stern questions the degree to which the tax deduction is an incentive to charitable giving,

People with income in the lowest quintile give a higher percentage of their earnings to charity than do more wealthy Americans. This pattern persists despite the fact that low earners have less disposable income and rarely take advantage of itemized tax deductions for charitable donations. Sure, some contributions are tax-driven: Almost a quarter of online giving occurs in the last two days of the year as taxpayers rush to qualify for deductions. But Americans’ generosity may be more resistant to changes in the tax laws than most people think.

Of course, Stern may be being unduly optimistic here. But in my view it is somewhat irrelevant. Even assuming giving should drop off somewhat, are charitable and religious organizations really as threatened as Land claims? I doubt it. If they have really become so dependent on favorable federal tax policies then the fault is their own for ignoring Rule #1 when it comes to maintaining liberty from government interference: He who controls the purse strings makes the rules …

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About Matthew J. Tuininga

Matthew J. Tuininga is the Assistant Professor of Moral Theology at Calvin Theological Seminary in Grand Rapids, Michigan.

Posted on December 28, 2012, in Religious Liberty, Richard Land, Taxes, Welfare State and tagged , , , , . Bookmark the permalink. Comments Off on Conservative special pleading on taxes: charitable giving.

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