Soaking The Rich Means Crippling Churches, Charities, and Home Values

Hugh Hewitt Blog | Hugh Hewitt | Feb. 27, 2009

President Obama’s budget is built on a massive tax hike on upper income families. From the Washington Post:

Individuals who earn more than $200,000 a year and families who make more than $250,000 would also lose the tax cuts enacted during the Bush administration, meaning their top income tax rate would rise to 39.6 percent from 35 percent, their investment income would be taxed at 20 percent rather than 15 percent and their deductions for mortgage interest, state and local taxes and charitable contributions would be reduced.

The attack on the mortgage interest rate deduction and the charitable deduction are simply hidden ways to increase the top rate beyond that of the Clinton years, but by using the deception, the Obama plan would devastate churches and charities that depend on the generosity of their highest income donors while also slamming the value of homes by reducing their value to borrowers.

I have argued with the FairTax advocates for years that their plan was a dangerous one because it struck at these two deductions which undergird so much of the American safety net and Americans’ wealth. If President Obama wants to raise rates above 39.6 percent, he should do so openly and honestly, and without doing enormous damage to the not-for-profit and housing sectors.

Democrats who vote for this scheme are voting against every church in the land and against the equity every American has in their home. Radical plans like this one make academics happy and voters angry. Very angry.

The GOP must immediately make clear that it will do all it can to defend churches and homeowners against this assault, and they must identify the 50 Democrats must vulnerable in 2010 and begin a very detailed web-based watch on what they say and do on these issues. It will be easy to explain why the plan assaults churches, synagogues, veterans’ organizations, childrens’s hospitals, private schools and not-for-profits of all sorts, and only slightly more difficult to explain that destroying part of the appeal of a home purchase hammers the entire housing market –from entry level to mansion– but these arguments have to be made again and again.

It is a radical plan, and no amount of smoke will cover that fact. Today’s Wall Street Journal editorial quickly covers the enormous, permanent expanision of government the budget proposes. President Obama did not push these radical ideas on the campaign trail, nor did any Democrat I am aware of. The Republicans and moderate Democrats have to stand up and refuse this invitation to fundamentally alter the American economy and its deeply embedded values of giving and home ownership.

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Comments

  1. Are the majority of individuals/families with incomes at these levels already donating truly large amounts to charities and churches? I do not think so, based on the non-scientific observation that charities and churches always voice their need for more funding than they currently receive. (I exclude here the ludicrous mega-“churches”, those embarrassing religious corporations sporting tennis courts and theatre broadcasting systems for their “church services.”) At any rate, the fear expressed has not been substantiated (by the author) with real numbers of giving levels. He can’t provide such substantiation, either, because it is private, personal information.

    I am neither Democrat nor Republican. (Nor does my family enjoy the astronomically high income under discussion.) This allows me the objectivity to pounce on unfounded stereotypes such as “Republicans support churches. Democrats destroy churches.”

    Discussions of home ownership and its “benefits”, I generally leave for others. If, however, I had the money to waste on some over-sized, luxuriously-furnished mansion, it would behoove me to pay higher taxes.

    A Christian does not base his charitable giving — “almsgiving”, to use the term used by the Holy Fathers — upon the presence or absence of tax breaks. HE SIMPLY GIVES.

  2. Blog-Editor says:

    AWC,

    Regarding your observation:

    A Christian does not base his charitable giving — “almsgiving”, to use the term used by the Holy Fathers — upon the presence or absence of tax breaks. HE SIMPLY GIVES.

    That’s true, but why punish them further, discourage them from helping and giving more, and confiscate the fruits of their labors and reward unions and other socialist institutions instead. That’s unethical, unjust, and unfair.

  3. Michael Bauman says:

    why punish them further, discourage them from helping and giving more, and confiscate the fruits of their labors and reward unions and other socialist institutions instead. That’s unethical, unjust, and unfair.

    ‘Cause, that’s what government does when it is given the power either specifically, by corruption/greed or apathy. All three are at work in our case. I would also disagree with all three of your adjectives: unethical (not for a socialist, just the opposite in fact); unjust (justice depends on one’s foundation in right and wrong, it only applies in a fallen world. It is never unjust to punish those who have done wrong is it?); Not fair—please thats a whinny word for a two year old, one that we have been assualted by for decades by egalitarians and it means anything the speaker wants it to mean. It is a destructive concept especially since it sounds so righteous.

    Tryanny is always the end result of any form of government when the people don’t submit to God first. What else can we expect. John Adams and others at the beginning of this country observed that the only thing which would allow the American experiment to succeed was the self-discipline of the citizenry. We don’t have that and haven’t had for a long time. IMO the United States of America ended with the Civil War, we are just now beginning to realize it.

  4. I actually think the charitable deduction for churches should be abolished.

    Why? Because it shackles the churches. How many times have pastors or priests wanted to shout something from their pulpits – only to fear the loss of the tax exempt status?

    Let the government tax churches, and let charitable contributions be taxed. Good. Then with what shall the government threaten the religious? How then to silence them?

    The only way left is naked force. Now it is only necessary to threaten the collection plate to silence so-called ‘moral leaders.’ I think it will be all to the good when churches take the full brunt of the government assault. If the churches won’t rally against this, then what institution will?

  5. Michael Bauman says:

    George, I agree with you about the tax-exempt status of churches. However, excessive taxation could well replace the velvet shackles of being tax-exempt. If the government can put punitive taxes on users of tobacco and alcohol, why not on religious believers; an anti-tithe that employers could be forced to police and collect.

  6. Good point, Michael, but that may get us to where we need to be much faster. The government has been able to attack tobacco users and alcohol users by actually playing to Evangelical sentiment. I can’t tell you the number of times I’ve heard religiously minded people say, “Good thing they tax cigarettes so heavily, less people with smoke!”‘

    If the yoke of government starts to put churches in danger, perhaps someone will finally notice. The government is destroying businesses and individuals, and most people are sleep walking through life. Perhaps if the churches are simultaneously freed of the silencing restraint of tax exemption and also subjected to the same economic pressures that are killing American businesses – then perhaps we might actually get enough fire in our bellies to do something.

  7. Michael Bauman says:

    George, if what you describe occurs the likely first result is the winowing of the flock. Those that already have the fire will respond, a few who have yet to develop the fire will have in born in them, the majority will drop away. Until it occurs we have not way to tell into which group we will fall. We can only pray and do the best we can to prepare encouraging others to do the same.