Sunday, March 8, 2009

Short Takes: Obama Eyes Charitable Deductions and A Light Hearted Diss

What is Obama's latest bright idea? He wants to limit the amount wealthy people can claim as a tax deduction for charitable donations. The Forward reports as follows.

In the short time that Barack Obama has served as America’s president, the organized Jewish community has been one of the young administration’s most solid bases of support for its liberal political agenda. But now, many of the major Jewish organizations are taking issue with a proposal that they fear will strike at their very lifeblood — charitable donations.

As part of a recent set of proposed revisions to the tax code, the Obama administration has suggested lowering the rate at which taxpayers in higher income brackets can deduct such things as mortgage payments, state and local taxes, and charitable donations.(emphasis mine,mj) The proposal, which would go into effect in 2011, is expected to generate an additional $317 billion in revenue over 10 years, and is a key part of the administration’s plan to set aside $634 billion to cover health care costs. The plan has left many Jewish groups walking a fine line between supporting the administration’s overall budget proposal and attempting to push back on the charity provision.

It is mind boggling that such a proposal would make it past the brainstorming stage. Private charities are the safety net that picks up after the mistakes of government and big business. From soup kitchens to summer camp, from the elderly to drug addicts, private individuals can come up with far more innovative, ad hoc solutions than government. As the Obama administration tinkers with the economy like an amateur mechanic, it should take care not to shred the safety net that has proven so crucial to so many Americans.

I am sure that Obama will find some witty quote or stirring anecdote to justify his proposals. But there are glaring deficiencies that need to be addressed.

A fundamental difference in economic philosophy is shaping up between the Democrats and the Republicans. The Democrats are proponents of fiscal transfusions, in which taxpayers are bled to sustain ailing corporations. The Republicans also envision a role for government, but one in which the government facilitates solutions to the nation's woes, encouraging the economy to heal itself through sensible tax codes.

This difference is starting to resonate deeply with the American people. Millions have invested in stocks for their children's future and for retirement purposes. They see themselves as having a place on Wall Street and a vested interest its success. The millions to whom demagogic appeals are made could be investors of billions of dollars if confidence were created and sustained. It is far better to appeal to the citizenry to invest in the nation's future than to ask them to wait by their mail box for the next stimulus check.

It is hard to imagine what Obama's strategy might be. His professed concern for the poor is belied by his tax code proposals which are frankly incoherent. A good President does not presume to be an expert in all or any field at all. The best chief executives are known for assembling a team of experts in the critical fields and listening to their advice. For the sake of the country, Obama should do this immediately.

We have endured less than two months of an Obama presidency. People like to talk about the honeymoon, that first hundred days when everyone is very kind in judging the new President. Obama, first two months are starting to look like the first marriage of Brittany Spears, which at 55 hours in 2004 lasted only a bit longer than the hangover that undoubtedly preceded it. There are two things that remind me of the American public's infatuation with Barack Obama. One is a country music song, the title of which is self explanatory. "There Ain't Enough Beer in Texas to Drink the Ugly Out of You." The other is the following video.

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