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Does Obama Owe the Nonprofit Community an Explanation?

I’ve been discussing Obama’s proposed tax changes reducing mortgage interest and charitable contribution deductions with just about every intelligent person I know who has been following this story. Not one person I talked to can make a rational arguement as to how this directly benefits anybody. I consider myself to be a pretty open minded guy and I want to know what I am missing here. You would think there would be a good reason for this.

I’ve had a few comments from people that it’s necessary to roll back some of the tax benefits that the rich have enjoyed under Bush and bring them back to levels that are Clintonlike. Some have said that the rich can afford to pay more in taxes, while others have said that cutting the charitable contribution deduction won’t impact giving levels all that much. I’ve described myself as fiscally conservative and socially liberal and while I do support adding to education, healthcare, and alternative energy, I haven’t been able to see how cutting the deductions on real estate and charitable contributions fit into the big picture.

These tax issues will only impact indivudials who earn over $250,000 per year in income, so sure, why not take more from the rich for other things. Folks, you are missing my entire point. You might even be surprised to hear that I support raising income taxes (BLAH!!!! Rich, you are no fiscal Republican you CLOSET LIBERAL!!!). Whoa, hold on a sec…I never said that people who have or make more shouldn’t pay more in taxes. That arguement has no part of this conversation so drop it. Second, forget whether this will only have a MINOR impact on giving and people will still give because, yes, most people give because they want to, not only for tax purposes. Folks, I’m with ya here too. Totally agree. Just explain to me what benefit we will see from cutting the deductions on mortgage interest and charitable contributions.

Ok, let’s start with the mortgage issue. For one thing, wasn’t real estate the source of the mess we’re in now? (Don’t start with “No it was those greedy folks on wall street” either). If we want to sove the real estate mess, one of the things we need to do is stop the decline in home prices. How do we do that? Prices will stabilize when credit markets open up and people begin buying again. How do you get people to start buying again? Don’t we want to get investors back into the market? How do we do that? Hmmm…Let’s see…How do you get your children to want to do something? Special treats? Any parents out there? Do you use treats to drive you children’s behavior? How about an incentive to purchase real estate? How about INCREASING the deduction for mortgage interest? How about offering INVESTORS (THE WEALTHY ONES) MASSIVE INCENTIVES to put money into real estate. How about not just limiting it to mortgage interest? Perhaps throw some other goodies in there. While I’m certainly not suggesting that we create a tax incentive aimed only at the wealthy, wouldn’t you agree that this would be a pretty juicy “scheme” to get those “greedy rich folks” to put some of their “bad money” into some of those empty bank owned homes that ar lowering propery values in our neighborhoods. Hmmm, not such a bad idea…I suggest creating some kind of similiar incentives to restore the health of the non-profit community. While we don’t live in a charity (although your spouse or your mother might disagree with you), charities provide a vital role in American society. Without a healthy and thriving nonprofit community, the services that they provide would either go away, or require the government to provide those services. I ask again; doesn’t that sound like a very “big government” agenda to you?

Ok, so the long and short question I pose to you is this: Regardless of what income bracket these rules would impact, does it make ANY sense to you to be removing incentives to investments in sectors that are among the leaders lagging the economy? Am I missing something here because this doesn’t seem to make one bit of sense to me. I certainly don’t claim to know everything since I’m just a Certified Financial Planner Professional, not a politician who knows much more than I. I really do like Obama and what he stands for and what he wants to do for healthcare, energy independence, and education. These areas are broken in my view. These are important issues for the nation and ones that I relate to personally. Frankly,  I don’t think that the Republicans have these issues on their agenda and about the only reason I’m a regiestered Republican is because I generally agree with their economic agenda. To be completely honest with you, I’ve never been registered with either party until this year’s presidential election when I became a Republican and voted for Obama. How’s that one for ya? I like to keep ya thinkin…

Ok, so now you know my concerns and questions. Anyone want to explain this to me? Anyone want to start a new political party?

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Filed under Current Events, NON-PROFIT & CHARITY, TAX

Arthur Brooks “Who Really Cares: The Surprising Truth about Compassionate Conservatism”

Talking politics and religion can be a lethal mix so I’ll tread carefully here. When I make conclusions about things (especially when it comes to religion and politics), I try and be particularly careful to point out when i’m injecting opinion versus stating facts on things. Arthur Brooks’s book, “Who Really Cares: The Surprising Truth about Compassionate Conservatism” is a book that states the FACTS about who gives and who doesn’t in America. The findings detailed in the book were quite surprising to me, and to Arthur Brooks himself, as he states in the book. This book was the focus of an ABC News 20/20 report entitled “Cheap in America” Who Gives and Who Dosen’t” 

A common perception is that liberals and Democrats are more “socially concerned” than conservative Republicans, and one might make the natural leap that because of this, they are more likely to be charitable. According to the research that Arthur Brooks conduced though, it’s exactly the opposite. How could that be? That’s impossible!

Brooks himself thought there might be an error in the numbers so he rechecked them. There was no denying the facts. Conservative Republicans, (who some argue would fire their grandmother to improve profitability) are statistically more charitable (more than 30% more charitable) compared to their “socially concerned” liberal democratic friends. Don’t shoot the messenger if you don’t like this, read the book and see the statistics for yourself. Just the facts here…

So how could this be you are asking yourself? Well the findings point right to the heart of the perceptions that “secular liberal democrats are more socially concerned than religious conservative republicans”. It turns out that the secular liberals (the Democrats) belive that it’s the job of the government to take care of the poor (no surprise here yet) and are more in favor of “income redistribution”, taxing and redistributing resources from those who have money to those who are poor. Socially leaning political views have actually taken the place of their charitable contributions. Brooks’s research shows that regardless of which political party was actually in office or how effective politicians were in their policies toward the poor, that the religious conservative Republicans consistently gave more than their secular liberal Democrat counterparts.

Brooks is careful to point out that there are many examples of charitable liberal democrats and non-charitable conservative republicans, however the research clearly demonstrated wide and across the board differences in giving patterns along political party lines. That’s not the only thing. Brooks points out that among the both the Republican and Democratic parties, people who are religious tend to give much larger amounts to charity, giving significantly larger amounts to  both religious and non-religious organizations compared to people who were secular non-religious. Among all religious people, Republican conservatives still give a statistically significant greater proportion than Democratic liberals.

Brooks notes that “secular liberals” and “religious conseratives” are increasingly voting along political party lines, with religious conservatives tending to align with the Republican Party and secular liberals favoring the Democratic Party. The smaller groups that cross party lines, the “religious liberals” and “secular conservatives” both represent a shrinking percentage of of their respective political parties’ makeup. If this trend continues, these groups may find that their views are at odds with those of greater majority of their political party.

What’s clear are the numbers. Arthur Brooks says that these findings should be a wake up call to to the Democratic party and to secular liberals. The nunbers show that the charitable giving trends diving political parties are increasing. The message:  All are apparently not equal when it comes to being giving.

Regardless of whether you agree or disagree with the findings, “Who Really Cares” is an entertaining read that will be sure to hold your attention and may change your perceptions.

Click here for video clip from “Cheap in America”

Next time…How giving makes you happy…

Who Really Cares

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Filed under NON-PROFIT & CHARITY