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As with any administration, tax and spending policies are telling indicators of
priorities. President Obama’s plan to reduce the tax incentive for giving to
churches and charities, while massively increasing spending on bureaucracies,
indicates that civil society is to be weakened and bureaucracy is to be
Asked whether he thought the tax policy would hurt charities, the President
insisted that it would not. Harvard professor Martin Feldstein disagrees,
estimating that Obama’s proposal will result in a loss of $7 billion a year to
churches and charities.
William Daroff, vice president of public policy and director of the United
Jewish Communities, says that with “a huge increase in the demand for social
services, and a simultaneous decrease in resources to fund programs,
governmental policy should be to incentivize charitable donations–not to create
more reasons for donors to forgo making contributions.”
The President says he thinks “it is a realistic way for us to raise some
revenue from people who’ve benefited enormously over the last several
It would seem that the President views churches and charities that heavily
rely on the generosity of donors as front operations whose sole purpose is to
shield wealthy donors from paying their fair share of taxes–money Obama says
Washington bureaucrats need more.
While $7 billion can do enormous good in the stewardship of churches and
charities, it is a pittance in the federal budget.
If you are keeping track, the stimulus spending is currently more than $800
billion. AIG has received $180.5 billion in taxpayer money so far. The U.S.
share of the global bailout agreed to at the recent G20 meeting in London will
likely be hundreds of billions of dollars. The Obama bureaucratic health
proposal starts at $600 billion, and the energy tax related to cap and trade
will be much more than that.
So why target churches and charities?
Alexis de Tocqueville wrote in Democracy in America that “among democratic
nations the notion of government naturally presents itself to the mind under the
form of a sole and central power, and that the notion of intermediate powers is
not familiar to them.”
That is, powerful centralized governments and the politicians who run them
have a propensity to operate from the premise that if government is not
providing a service, then the service is not being provided at all.
Unlike churches and charities, which largely rely on voluntary contributions,
the federal government has the authority to confiscate earnings it sees fit.
Whether you agreed with the 90 percent tax directed specifically at AIG
employees who received retention bonuses or not, it perfectly demonstrated the
government’s power. Targeting churches and charities is no different.
These comparatively small but abundant charitable institutions are providing
services that some politicians feel rightfully belong to the federal government.
By diminishing churches and charities, the administration fulfills a
self-preserving objective of consolidating federal power by creating more
taxpayer-funded programs to provide the services churches and charities are
Since Lyndon B. Johnson’s Great Society, politicians have systematically
diminished the intermediating powers of churches and charities that de
Tocqueville thought were essential to democracy. Cutting the incentives to give
would seem to be exactly the wrong policy–that is, unless the intention was to
deliberately weaken them further.
And so it is. Where individual initiative to provide a service for the public
good, whether for his country or community, can simply be overrun by the federal
government’s natural inclination to expand, the ability for Americans to serve
others without government interference will diminish precipitously. Whether
intentional or not (and we suspect it is intentional), instituting policies so
that intermediating institutions that feed the hungry, thwart human trafficking,
care for the homeless, break the cycles of addiction, research cures for
disease, minister to prisoners, and build homes to restore lives are
systematically weakened undermines civil society in ways that are incompatible
with our country’s survival.
If churches and charities do not stand in that gap, the governmental
bureaucracies will, however inadequately, fill it, thus reducing citizens in
need to clients who fill political objectives.
In 1996, welfare reform was an enormous achievement, not so much for the
billions of dollars it saved but for the lives it renewed. The cultural shift
from dependency to responsibility restored a social contract that had been
absent since the Great Society, in which more than a trillion dollars of wealth
was confiscated from the productive and given to the unproductive, with
devastating consequences. The lingering cost of that failed experiment is still
being paid by people living in zones of hopelessness where fathers were replaced
by the state.
De Tocqueville again: “As soon as common affairs are treated in common, each
man notices that he is not as independent of his fellows as he used to suppose
and that to get their help he must often offer his aid to them.”
That is, if a citizen is to expect help from his fellow American, he has an
implied obligation to offer help in return, creating a social capital to which
all Americans can contribute and, when necessary, draw. Understood was a
reciprocating binding social contract of accountability. Citizens had an
obligation to help, but recipients also had an obligation to return to the
productive side of the social capital ledger. Only then could these
intermediating institutions be sustained.
If we should reach the precipice of such a condition where churches and
charities succumb to encroaching federal power, we should finally learn the
meaning of de Tocqueville’s warning. “It is in vain to summon a people who have
been rendered so dependent on the central power to choose from time to time the
representatives of that power; this rare and brief exercise of their free
choice, however important it may be, will not prevent them from gradually losing
the faculties of thinking, feeling, and acting for themselves, and thus
gradually falling below the level of humanity.”
Goodbye churches and charities, welcome bureaucratic and politician
domination. That is the wrong direction, and it should be defeated.
Newt Gingrich is a senior fellow at AEI. Rick Tyler is the founding
director of Renewing American Leadership.
Churches and charitable institutions provide services that some politicians feel belong to the federal government.
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