And have not charity

It is not possible to endorse the work of charitable agencies -- including "faith-based" agencies -- while simultaneously working to eliminate the estate tax.

President Bush claims he wants to expand the capacity and effectiveness of "faith-based" nonprofits. If he succeeds in eliminating the estate tax, however, his legacy will be that of the president who crippled the nonprofit sector and drove many of those faith-based charities out of business.

The Congressional Budget Office has completed a new study on the impact of the estate tax on charitable giving. It confirms what every previous study on the subject had found: Elimination of the estate tax would result in a decrease in charitable giving of up to 12 percent.

Consider the impact of that decrease.

This is essentially a 12-percent, across-the-board budget cut for every nonprofit and philanthropic agency in the country: Art museums, hospitals, soup kitchens, theaters, health clinics, universities, housing agencies, operas, domestic violence shelters, mentoring programs, dance companies, after-school programs, conservation and preservation groups, homeless shelters, orphanages, adoption agencies, local churches, food pantries, parochial schools, libraries, animal welfare agencies, historical societies, mission agencies, job training programs, group homes, disaster relief agencies, international aid groups. The scope of their work is vast. Their impact is immeasurable.

All of these will have to learn to make do with 12 percent less. They will have to do 12 percent less. We're talking about a 12-percent decrease in the good, the beautiful and the true.

More than 12 percent, actually. Many nonprofit agencies operate with very tight margins. This is particularly true of those agencies that serve the neediest and poorest. When the art museum catches a cold, the soup kitchen gets pneumonia. For many vital nonprofit agencies on the front lines, a 12-percent drop in charitable giving will mean they have to close their doors.

On the other hand ...

There is no other hand. There is no sound policy reason to abolish the estate tax. None. (Max vivisects the disingenuous arguments for repeal here.)

Eliminating the estate tax will increase the federal debt by hundreds of billions of dollars over the coming decades. That debt will eventually have to be repaid the same way the rest of the Bush deficits will -- through massive tax increases on our children and grandchildren.

But even if future generations find a way to replace the lost revenue, they won't be able to replace the loss of one of the largest incentives for charitable giving. They won't be able to reach back in time to restore the nonprofit agencies whose work was hobbled or ended by Bush's foolish and unnecessary elimination of the estate tax.

It's hard to imagine a more perverse and indefensible piece of legislation than this evil and unnecessary bone to the ultra-rich. Its supporters ought to be forced to defend and explain their position.

Opponents of this measure need to get out of the Capitol building and start holding press conferences at those nonprofit agencies whose future is at stake. I'd like to see members of Congress standing alongside nurses, college presidents, librarians, tutors and ballet dancers at the doors of their local food pantries, explaining precisely what a 12-percent budget cut will mean for these essential institutions.

Comments

[pharoute]

This is the time to hit the "religious" right with the Ten Commandments; I think there's something in it about having only one God. What God do you worship when you pad the bank accounts of billionaires by taking money from charities???

[animus]

Well, they could always make up the difference with direct government grants to "faith-based" charitable organisations, thus giving themselves the power to punish any charities that are based on the wrong faith, or are too outspoken on policy issues, or that work on causes that aren't sufficiently deserving, or whatever.

Of course, this would not only be a huge government intrusion into the charitable sector, but it would also be incredibly evil, so the chances of the present administration doing it are... uh oh...

[Dave Lartigue]

Remember the words of Grover Norquist. The estate tax is exactly like the Holocaust.

[Mabus]

You know, this was the first post of Fred's about anything other than Left Behind that I've unequivocally agreed with. Until I read the first blog to reference him.

Should the government really be putting the squeeze on people that way? "Give it to the charities or we'll confiscate it ourselves." Is that an appropriate way to get things funded?

[Ol Cranky]

Hey the inheritance tax is completely unfair. After all it's money the uber-rich managed to avoid getting taxed through some loop-hole or tax break and it's just plain wrong to actually tax it when it's passed on to the next generation.

[Catherine]

I hope there is a god and he sends them all to hell.

[Mike the Mad Biologist]

I agree this will screw over both soup kitchens and museums. What will it do to the theocon and the conservative charities (megachurches & wingnut think tanks)? Are they 'immune' to this, or will they get slammed too?

[R. Mildred]

The "faith Based" charities (not to be confused with charities that stem from some belief that charity is a religious duty for the pious) Are essentially partisan Republican funded agencies at this point, who toe the official party line in exchange for candy and the occasional "faith-based" peice of legislature, which are faith-based because the republicans know exactly how to get a bill passed but in the case of bills that are against the republican party's main god (hint: Washington and jefferson both lent their faces to this idol) and internal beliefs, have nothing more than a wing and prayer to help them though the legislature.

Because of the vast leftwing jewish conspiracy, or something.

[Dave Lartigue]

"Should the government really be putting the squeeze on people that way? "Give it to the charities or we'll confiscate it ourselves." Is that an appropriate way to get things funded?"

As opposed to what? When given a choice, people mostly choose not to give anything to charity. Is it truly not the government's job to provide for its citizens in need? What do we tell them, "No money today! Sorry, no food for you!"

Conservatives are constantly saying that this is the work of charities, not government, but my personal experience finds they don't give to charities either.

[blogan]

Dave, I don't know the conservatives you know, so I won't argue with your experience. Here's some data you might find interesting.

A few months back, the "Generosity Index" was a hot topic on the blogs. According to the generosity index people: "Generosity is not just how much you give, but how much you give in relation to how much you have." When that calculation is done (and how it's calculated is documented on their website), an interesting pattern emerges. States that voted Red tend to have higher generosity indexes than those that voted Blue. For a tabular listing, you can go to Michelle Malkin's post, Most Charitable States--Red or Blue? (Both Michelle and the generosity index people also provide the data in .xls format.)

I don't have an explanation. Do you?

[Beth]

I don't have an explanation. Do you?

I do. Generosity (as defined by the percentage of income given to charity) tends to be inversely proportional to income, so in general, the richer you are, the less of your income you give to charity. According to Malkin, the index "is computed by taking each state's average income and average charitable contribution," which exaggerates that tendency. Imagine, for example that New York has a population of 101, one hundred of whom make $40k a year and give $4k each to charity. The remaining New Yorker makes 1 million a year and give $10k to charity. Each New Yorker gives 10%, except the millionaire who gives 1%, for a state average of about 9.9%. But if you add the entire state income and charity instead of looking at each resident individually, New Yorkers have a combined income of $5 million and combined giving of $410k for a state average of only 8.2%. Those unfortunate New Yorker's lost 1.7 generosity points because of nothing but a statistical quirk.

Of course New York doesn't really have a population of 100, but the principle still holds. The index is skewed to make states where the rich live look a lot less generous than they really are. Since the rich live mostly in blue states, the index is skewed against the blues. Interestingly, though, the rich also voted for Bush by a significant margin, so it's actually Bush voters, not Kerry voters who make the blue states look so cheap.

[drieux just drieux]

Great Rant Dude... Especially the comical commentary entry citing Michelle Malkin - the defender of internment camps.... WOW! No wonder all of this advanced math stuff confuses them.

When my mother passed on, her legacy was organized to optimize the problems with the 'inheritance tax' so as not to impose a tax burden upon the recipients. As such there was a pleasant support for the episcopalean diocies and her local church that she had been very active in.

Ah yes. But as we all know, episcopaleans are got hating america bashers who do not understand the one true patriotically correct biblically literal instance of faith based charity for ideologically correct support of the holy war against all evil doers.

[blogan]

Beth, you make a good point. Upon further investigation, I discovered that the Catalogue for Philanthropy also calculates the generosity index for three ranges of adjusted growth income. This prevents a statistical outlier from skewing the average. I posted a chart and some analysis on my blog. In short:

"When we eliminate those greedy, fat cat Republicans by limiting our inquiry to those in the $75,000 to $100,000 AGI range, the red states are even more dominant on the top of the generosity index ranking than if we look at the data for all returns."

[Beth]

When we ... limit our inquiry to those in the $75,000 to $100,000 AGI range, the red states are even more dominant on the top of the generosity index ranking

Congratulations, but I suppose it didn't occur to you that in addition to eliminating those those greedy, fat cats, you also narrowed the field from the total population, which supported Bush by a margin of about 2% to a subset that supported him by about 10%. So what have you proven? That overall, blue state Kerry voters are more generous than blue state Bush voters? Not even that. For one thing we have no way of knowing whether it was the Bush voters or Kerry voters who gave that money. For another thing, tax returns are a pretty poor way of judging generosity in the first place. When I buy coffee, I always get Free Trade. It costs a few bucks more, but the extra money goes to struggling workers in poor countries. I also volunteer at a local homeless shelter and babysit for free for a neighbor of mine who's been making the difficult transition from welfare to work. None of that shows up on my tax return. If instead, I'd donated $20 to my local church toward the purchase of more comfortable pews, I could have written of the entire amount. Would that have made me more generous?

[blogan]

Beth, good point. I don't know if the data we need is available. The AGI ranges at Catalogue for Philanthropy (CFP) don't go lower than $75,000. Maybe CFP has more data than it posts on its site. Looks like Marty Cohn may be getting another phone call. (Btw, I don't believe that CFP has a red/blue political agenda. There stated purpose is to encourage charitable giving in Massachusetts and New England.)

Even if the data was right on point, there is some question as to what conclusions we can draw. There are probably other factors in play. Nothing is ever this simple. Maybe it's population density, education level, availability of social service programs, religion demographics, exposure to overwhelming need, etc., that makes the difference instead of the red v. blue voting patterns. Maybe (as you suggest) the generosity index doesn't capture all the charity that occurs and that additional charity coincidentally follows voting patterns (not unreasonable because voting patterns approximate voters' view of the role of government in everyday life).

Charity is an interesting topic. This discussion started with the idea that estate taxes encourage/coerce charitable giving. I would be interested to learn what effects other government actions have on charitable giving.

[blogan]

Beth, I searched the IRS web site to find the statistics on charitable giving for AGIs less than $75,000. That would be necessary to get us out of the range of predominantly Republican voters.

While I was searching, I realized the statistics would be increasingly less relevant for the discussion at hand for lower AGI ranges. At some point, there is no benefit in filing an itemized return because the standard deduction works just as well. (I don't know that point; I'm not a tax expert.) So, can we compare the generosity of Democrat voters with that of Republican voters? It appears not, at least, not using tax statistics.

I'm not sure I'd trust other polls correlating giving and voting patterns, either. We recently experienced how unreliable exit polls are.