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The Public Policy
Obama Ignores His Tocqueville
In his 1835 masterpiece, Democracy in America, Alexis de Tocqueville, reported on his observations of the American scene after an extensive tour of the new Republic. One of his most profound insights had to do with the genius of Americans in the formation of institutions that mediate between large, distant government and the solitary, insular individual:
Americans of all ages, all conditions, and all dispositions constantly form associations. They have not only commercial and manufacturing companies, in which all take part, but associations of a thousand other kinds, religious, moral serious, futile, general or restricted, enormous or diminutive. The Americans make associations to give entertainments, to found seminaries, to build inns, to construct churches, to diffuse books, to send missionaries to the antipodes; in this manner they found hospitals, prisons, and schools. If it is proposed to inculcate some truth or to foster some feeling by the encouragement of a great example, they form a society. Whenever at the head of some new undertaking you see the government in France, or a man of rank in England, in the United States you will be sure to find an association.
Americans in the 20th and 21st centuries will recognize this phenomenon whether it be in their own participation in the American Lung Association, Lion's Club, PTO, Red Cross, Salvation Army or the Nature Conservancy (TNC).
Indeed, the TNC is the largest land conservancy or trust in the world. It is also emblematic of a tremendous movement in the United States today. According to the Land Trust Alliance, the land trust movement doubled in size between 2000 and 2005, in both number of organizations and acres of land protected. Today, private philanthropic dollars protect an area 16 and a half times the size of Yellowstone National Park.
Unfortunately, the Obama administration is on the brink of un-doing this private sector success story, along with even more important work done by educational, religious, health, cultural and social welfare organizations dependent on private philanthropy.
Writing in Wednesday's Washington Post ("A Deduction From Charity"), Martin Feldstein, the estimable professor of economics at Harvard and president emeritus of the National Bureau of Economic Research, described the magnitude of the change proposed in President Obama's plan to limit the tax deductibility of charitable contributions.
Basically, the proposal will "effectively transfer more than $7 billion a year from the nation's charitable institutions to the federal government."
Moreover, the high-income taxpayers who are the supposed target of this measure "are likely to cut their charitable giving by as much as the increase in their tax bills, which would, ironically, leave their remaining income and personal consumption unchanged."
The Center on Philanthropy at Indiana University predicts a decline in giving of 2.1 percent, with donations by the highest-income households reducing their giving by 4.8 percent or $3.87 billion.
"In effect, the change would be a tax on the charities, reducing their receipts by a dollar for every dollar of extra revenue the government collects," says a mystified Professor Feldstein. "I suspect that the administration officials who drafted this proposal did not understand that it would have this perverse effect."
Neither does President Obama. In his press conference this week, he claimed, "I mean, if you look at the evidence -- there's very little evidence that this has a significant impact on charitable giving."
The new tax change would apply to those undeserving married couples earning more than $250,000 (and single people earning more than $200,000). You know who you are.
As Feldstein explains, a high-end earner paying a 35 percent marginal tax rate now lowers his or her tax bill by 35 cents on every dollar contributed to a charitable organization. Evidently, the economic literature indicates that, on average, every 10 percent reduction in the cost of giving raises the amount that a person gives by about an equal percentage. So, again, the high earner increases his or her donation by 35 percent, given a 35 percent deduction.
The kill-joys at the White House and Treasury would limit the amount the high-income earners can deduct to 28 percent. "This raises the cost per dollar of giving from 65 cents to 72 cents" or 10.8 percent, thereby reducing total giving by such donors by nearly 10 percent.
Feldstein plays around with the numbers to show how this all works out in practice to the detriment of the prospective charity that is dependent on voluntary donations. He calculates that by 2011, the year the Obama administration plans to implement this new tax rule, private giving would decline by more than $7 billion. And this is on top of the losses sustained by most charities due to a collapsing stock portfolio.
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Robert Rosencrans| 3.27.09 @ 7:24AM
It's been proven time and again that conservatives give more to charities and non-profits than liberals. You could say this is an attack on conservatism in a way, but it's far more then that.
It's just another element of the Obama administration grab for power over everything, which is also evidenced by Geithner's plan to seize companies if the government desires.
These people are statists, and instinctively hate the successful individual.
The new rule is not that it takes a village, but that it takes a cabal of bureaucrats, and only they can be trusted.
TennesseeVolunteer| 3.27.09 @ 8:45AM
Another reason why the flawed President of Notre Dame should withdraw his invitation to the leader of an administration who:
- champions abortion
- ignores life with the encouragement of embryonic stem cell research with absolutely no proof that they will be more productive than adult stem cells
- is penalizing Notre Dame, and all non profits, in charitable fund raising
52% of our electorate just gave the keys to a new Corvette convertible with a full cooler of beer to a bunch of 16 year old drivers with learners permits!
Rick Josey| 3.27.09 @ 9:15AM
Americans are generous givers. They give from the heart. By tradition they follow the mandate of ancient Scripture to give "willingly, not under compulsion."
But our federal government is on a course that will destroy our philanthropic endeavors. Government TAKES from the people, by coercion. That's what forced taxation is all about. And now they want to destroy the basis for philanthropy.
Is this what giving Americans really want?
Vote the liberal loons out of office.
www.PatriotHangout.com
Franklin's Locke| 3.27.09 @ 9:37AM
This is a direct attack on charities that the Liberal does want around. The Left wants everyone to be dependent on government and these charities interfere with that agenda.
http://franklinslocke.blogspot.com/
Wee Willie| 3.27.09 @ 10:05AM
Obama is/was easy to understand because of my four foot shelf of books on communism. Whitaker Chambers in "Witness" states that communists are forbidden to give private charity. This was also mentioned in Benedict XVI's encyclical on charity.
ARealist | 3.27.09 @ 11:23AM
Obama in NOT ignoring Tocqueville.
Obama is a Marxist Leninist and his goal is to destroy every family and volunteer institution in this country.
He is INTENTIONALLY supporting policies that will destroy the family, individual freedoms, and capitalism.
He is nothing more than an adherent of those Marxist Leninst pig , Alinsky, Ayers and Rev. Wright; aided of course by Mr. "can't let a crisis go to waste" fascist Nazi bolshevik pig Rahm Emanuel.
Remember, the ends justifies the means. Also remember that all communists are liars, double crossers and thugs. So is Obama.
Unfortunately, the media and most of the electorate have fallen for this lying communist Nazi pig because of his gift of oratory and his skin color.
Martin| 3.27.09 @ 11:38AM
The defunding of charities and the home mortgage market are about the only action of BHO I have so far agreed with. The US "invests" far too much in housing, including the ridiculous McMansion fad, most of which were built of cardboard and will fall down within 10 years.
As for charities, they are the principal support of the worldwide left, because they employ a vast army of people, all of whom regard themselves as morally superior to the private sector. Yes, a few do some good for the poor, and I would be sorry to see opera de-funded, but in general it is absurd for Conservatives to oppose restrictions on this massive and dangerous hard-left lobby. Foundations, taking the fortunes of good right wingers like Henry Ford and John D.Rockefeller to destroy everything Ford and Rockefeller believed, are the worst of all, of course.
Son Of Sam| 3.27.09 @ 11:43AM
Liberalism is nothing more than an attack on the middle class. The ObamaNazis are just the latest wave in that attack. This article demonstrates perfectly just how vicious and evil the regime of traitors and tax cheats in the White House really is: they want ALL help and aid to come from THEM, instead of we the people. That is part of the reason why people have gathered and are gathering all over the country at Tea Party protests and rallies.
We should not stop there: we all need to DIS-AFFILIATE from the Democrat party, AND cancel all subscriptions to any publication that is carpet bombing us with pro-Obama propaganda. Send in those party cards and magazine covers with a big red X across them, and attach a note saying they will never get your vote or your money again as long as they support the TelePrompter In Chief and his sickening attack on America
until freedom dawns
Son Of Sam
http://www.geocities.com/samadamssos/
John II| 3.27.09 @ 12:41PM
Mr. Obama's passing reference to what he claims to be the negligible effect on charities of eliminating charitable deductions is a particularly good example of his bogus and mendacious speechifying.
The point is, the logic of Obama and Company's emerging policies is state control of ALL aspects of human endeavor. There's an unmistakable motif running through the stage-directions of Professor Obama and the chattering class to which he belongs: they have never produced anything, never provided any needed service, and never met a payroll. They are interested only in Power and its attendant manipulation. Charitable giving weakens the power of the state--that's all Professor Obama knows or cares about the issue, if only instinctively.
And he's not "forgetting" Tocqueville. The notion that Obama has ever read Tocqueville is ludicrous: he is an ideologue, which is to say, he doesn't care a whit about ideas.
ValricoJoe| 3.27.09 @ 3:14PM
This all started with FDR in the 1930's where the church and local charitable organizations were assaulted by the Fed. that took from the people and gave to the ones they deemed worthy. Obama and co only want to complete the process.
Charles Martel| 3.27.09 @ 6:43PM
The Obama government does not object to charities. They just object to *your* charities. They feel that they know best how to spend your money; therefore, you won't need as much of it.
You can keep giving, but it'll cost you more. But what do they care? Besides, this affects only those making the astronomical sum of $250,000/year. The rest of you are getting a tax cut!
Oh, wait....
I have to laugh. I mean, who *didn't* see this coming?
+++
tjs| 3.27.09 @ 8:34PM
Great article to inform us, but we already know how Anti-American this president is.
Fact # 1: Government exists for one reason only. To protect our borders. Also required to enforce the laws of the land.
Fact #2: We fought a war over less than what they are imposing on us now.
Fact #3: Charity is only viable and effective at the local level. ALWAYS.
Fact#4: Anything government is involved in is an utter failure. Please show me a shining example of government excellence?
Fact#5: The administration in charge will develop and sell legislation to the country that will enable them and their cohorts to remain in power as long as they can.
Fact#6: This administration and liberals in general, truly believe that government programs can work because when it was tried before "they" weren't the ones calling the shots. They can make "government" work..! ? I don't think so....
Fact#7: History shows us the utter failure of governments to "help" the people..!
Fact#8: We are doomed as a Nation unless we stand up against the tyranny we are now, and will be facing in the next 3 1/2 years.
Fact#9: There are " ABSOLUTE" patriots out here in flyover country who are ready and able to return our beloved country back to what it needs to be. We believe in limited, small government, term limits, and minimal taxation for the protection of our borders and are ready to die for our country.
Fact # 10: Our country was built and founded upon a set of guidelines and moral standards that will not work for an immoral populace... Hence, take God out of our schools, government, and lives, we will reap the benefits of that decision. I pray for the immoral deniers in our country who will answer to their Creator.
Fact#11: It is really simple. Leave me and my family alone to pursue life, liberty, and the pursuit of our happiness.
Gazinya| 3.27.09 @ 10:40PM
Every dollar that is 'given' to an association or an organization is just that much less control The Obama has on that group. It will always be about control. The Obama has not given, in my opinion, one inkling that any of his policies is not about taking control away from the individual.
Cow Rie| 3.27.09 @ 11:57PM
Your article mentioned that perhaps Obama didn't undersand the impact of his decision
on charitable giving. That is generous.
My feeling is that Obama is either that ignorant
and stupid, or they are that arrogant in wanting more of the private wealth directed at those charities Obam does not approve. Actually I think it is both. Obama is stupid AND arrogant.
pjean| 3.28.09 @ 12:02AM
The Obama administration revels in increasing it's chokehold on the free will of Americans.
Al| 3.28.09 @ 6:31PM
Obama and his "handlers" (oh yes, go not think for a minuet that he got to the White House on his resume!) goal is to squash what Tocqueville observed. Then the individual that has a crisis will have to depend on Washington. It's called Dependency!
Alan Brooks| 3.29.09 @ 12:00AM
Well see.
Repuglicans told me Clinton wouldn't be re-elected, and now after eight years of his being out of office his wife is secstate...
Repuglicans are not good at being futurists-- which is actually a good thing in my eyes! oh if only Newt would repudiate the Toffler palaver, and stick to being a statesman for here & now, not 50 years from now.
But perhaps he is too stuck in his ways, being so long in the tooth.
David Govett| 3.29.09 @ 2:36AM
His Tocqueville?
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