Tag Archives: Non-profit

How Obama’s tax increases affect private charity and non-profit organizations

The Washington Examiner takes a closer look at President Obama’s latest stimulus bill.

Excerpt:

A significant portion – $400 billion over 10 years – of President Obama’s jobs bill is apparently funded through the limitation of itemized deductions for the “wealthy.”

This proposal would create a perfecta of unintended public policy consequences.

First, taxes for wealthy philanthropists would go up while taxes for wealthy Scrooges, those who make no charitable contributions, would remain virtually the same.

Second, if the philanthropists decide to reduce their philanthropy because of the additional taxes due, charities would have less revenues and would need to contract their charitable missions. Not good.

Over the years, the Internal Revenue Code has been amended and amended again. These amendments have severely reduced or eliminated the availability of most itemized deductions for the “wealthy.”

The article explains how the current tax code limits the wealthy from claiming most tax credits that are available to lower and middle income earners. The only tax credits that the wealthy can use are the mortgage interest deduction and the charity deduction. Whatever taxes that Obama wants to raise before he can raise the income tax brackets will have to come out of those two credits.

The article continues:

The home mortgage deduction is currently limited to the interest on a $1 million mortgage. With interest rates at 5% or so, the maximum tax increase related to home interest for any individual taxpayer from the proposed limitation on itemized deductions would approximate only $3500.

Therefore, the expected increase of $40 billion dollars a year in federal revenues for the next decade must be funded from “wealthy” individuals losing a portion of their itemized tax deduction resulting from their charitable contributions.

Consequently, we get to this unusual social result. If a “wealthy” philanthropist donates $1 million dollars to the Red Cross in 2012 and then does so again in 2013, his or her taxes would increase by $70,000 in 2013 over 2012.

If the “wealthy” next-door neighbor, Scrooge, made no charitable donations in 2012 and continued that pattern in 2013, Scrooge’s taxes would not increase in 2013. Now there is a piece of public policy – let’s raise taxes only on the good guys!

Most ‘wealthy’ individuals donate to charity only after determining how much they can afford in after-tax dollars. One has to think that the practical result here is that many, if not most, “wealthy” taxpayers would reduce their contributions to achieve the same after-tax cost of their charity.

So, by raising the taxes on the “wealthy” philanthropist, the proposed bill would very likely punish the poor by reducing the funds received by the local food bank etc. as large charitable donations decline. It is odd public policy, in troubled times, to propose a jobs bill that would hurt charities and therefore the poor.

This policy of Obama’s will result in a massive cut in funding for private charities and non-profits, including churches. Including churches. But that is exactly what a secular leftist like Obama wants. The state has to be everything, and all rivals to the state must fade away. The family has to be destroyed, and the church, too.

Indiana Governor Mitch Daniels signs bill to defund Planned Parenthood

From Fox News. (H/T Dad)

Excerpt:

Republican Gov. Mitch Daniels said Friday he will sign restrictive abortion legislation, making Indiana the first state to cut off all government funding for Planned Parenthood and boosting Daniels’ credentials among social conservatives as he considers whether to run for president.

Daniels said he supported the abortion restrictions from the outset and that the provision added to defund abortion providers did not change his mind. He said women’s health, family planning and other services will remain available.

“The principle involved commands the support of an overwhelming majority of Hoosiers,” Daniels said in a statement announcing his intention to sign the bill when it arrives on his desk in about a week.

[…]State Rep. Linda Lawson, a Democrat from Hammond who opposes the bill, said the legislation wouldn’t win Daniels any friends among independents and women.

I thought he was only a fiscal conservative. Oh well, I guess this is fiscally conservative.

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Republicans move to defund Planned Parenthood at the state level

Unborn baby scheming about federalism
Unborn baby scheming about federalism

From Life Site News.

Excerpt:

Days after Republican Congressmen in Washington abandoned the effort to strip Planned Parenthood of its federal funds, the battle continues in state legislatures across the country.

In North Carolina, Republicans added a provision to the state budget last week that would prohibit the state from providing grants or entering into contracts with Planned Parenthood, a measure which would deprive the organization of the $473,000 it currently receives through state family planning programs.

Representative Nelson Dollar, chairman of the House appropriation subcommittee for Health and Human Services, told the Raleigh News and Observer newspaper that the provision is unrelated to the issue of abortion.

“There are a whole host of programs being reduced. Planned Parenthood is not unique,” he said, adding that the proposed budget still allocated $3.6 million towards other teen pregnancy prevention programs.

A similar measure prohibiting state grants and contracts with Planned Parenthood was added to a pro-life bill in Indiana yesterday. According to an Associated Press report, Planned Parenthood is currently receiving $3 million in Indiana state funds.

The larger bill of which the funding provision is now a part, HB 1210, would also prohibit abortions after 20 weeks gestation. The current legal cut-off in Indiana is 24 weeks. The bill has yet to be voted on by the state Senate.

Also on Monday, Minnesota Republicans introduced SF 1224, a bill that does not mention Planned Parenthood by name, but which prohibits state grant funds from being given to any organization that provides abortions or refers patients for abortion.

If passed, the bill would remove state funds from all of the 24 clinics that Planned Parenthood operates in Minnesota.

This past week’s legislation mirrors other recent efforts in Wisconsin and New Hampshire to keep Planned Parenthood from receiving fund from state coffers. Wisconsin Governor Scott Walker unveiled a budget proposal in early March which eliminates the Title V Maternal and Child Health Program. Title V is the source of roughly $1 million in funding for Planned Parenthood’s 27 Wisconsin clinics, according to the Huffington Post.

The proposed budget is currently stalled by tense debate over its radical overhaul of state finances, including cuts in education, and health-care and pension plans for public employees.

Legislative efforts in New Hampshire have also come to a standstill, after a bill specifically targeting Planned Parenthood was introduced in early February. HB 228 would, like the North Carolina and Indiana legislation, prohibit the state from entering into a contract with Planned Parenthood; it is currently retained in committee in the House.

Planned Parenthood stands to lose approximately $800,000 if the New Hampshire legislation is passed.

Read the rest, there’s more.

Abortion is about profits. It’s a business. If we vote to cut off the taxpayer subsidies, the abortions will stop. Get government out of the health care business, and the abortions will stop.

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House Republicans win vote to defund Planned Parenthood

Unborn baby scheming about schemes about voting Republican
Unborn baby scheming about voting Republican

This is from Life Site News. (H/T Eleanor)

Excerpt:

In a historic vote Friday afternoon, the US House voted to strike all federal funding for the Planned Parenthood Federation of America. Every year the abortion giant receives hundreds of millions of dollars in taxpayer funding.

The congressional body voted 240-185 in favor of the amendment, introduced by Rep. Mike Pence (R-IN), to the 2011 Federal Spending Bill.

Immediately after the vote Rep. Pence released a statement saying: “This afternoon’s vote is a victory for taxpayers and a victory for life. By banning federal funding to Planned Parenthood, Congress has taken a stand for millions of Americans who believe their tax dollars should not be used to subsidize the largest abortion provider in America.

“I commend my colleagues in both parties for taking a stand for taxpayers and a stand for life.”

The amendment will now go before the Senate.

The vote came after a heated debate in the House. It also comes in the wake of an explosive series of videos released over the last two weeks by the pro-life organization Live Action, which showed Planned Parenthood staff repeatedly willing to aid and abet the trafficking of underage “sex workers” by offering advice to an undercover investigator posing as a “pimp” on how to obtain secret abortions, contraception, and STD tests.

Here’s some information on the finances of Planned Parenthood.

Excerpt:

I’m sure the House Clerk has had his hands full all week, with the nearly 600 amendments filed and the many that were voted on during the fiscal 2011 spending debate. As a result, his website has been rather slow to update. At this point, though, we have all the votes on the spending bill, and there are two I’d like to point out right away. I’ll look at the final vote in a subsequent post, but here is the first one, yesterday’s Pence Amendment, by which the House voted rather convincingly to stop $363 million in subsidies for the nation’s largest abortion provider, Planned Parenthood, and its many affiliates nationwide.

Even if you’re not a social conservative, funding for Planned Parenthood as a fiscal and a campaign finance issue. Currently, taxpayers are effectively subsidizing the Democratic Party. Planned Parenthood is a charity with plenty of donors. There’s no reason why taxpayers should have to support their favorite charity so that they can give more of their money to Democrats.

Take, for example, Planned Parenthood of Greater Indiana. Its IRS 990 form for 2009 reports that this affiliate had $10.6 million in revenue from  patient services (including $1.2 million from Medicaid — an entitlement not covered by this spending bill). It raised $2 million and then took in $3 million in government grants. On the other side of the ledger, the group reports providing $14.6 million in services. With additional efforts to raise money and a bit of budgeting, they could probably operate at the same pace without the special handouts. (Their medical director made about $300,000 in 2009 — if he believes very strongly in the cause, perhaps he can settle for a bit less.)

If abortion were really supported by the majority of the American people, then surely the people who support abortion would be able to dig deep into their own wallets and just give Planned Parenthood all the money it needs to keep killing helpless babies. But I don’t think they are going to do that. And since they are not going to do that, Planned Parenthood will probably have to raise their prices for abortions. And as long as Obamacare doesn’t fund those abortions, then a lot more people are going to have to pay more for abortions. And since a lot more people don’t want to spend that money on abortions, a lot more people are going to stop treating sex as a recreational activity and behave more responsibly. Responsible behavior is what happens when people have to face the consequences of their own decisions.

I’m a fiscal conservative and a social conservative, and I don’t want my tax money going to kill innocent babies. I worked for that money and it’s mine – I earned it. I have to work weekends without pay just to keep my job. If all of these left-wing liberals are so comfortable with their jobs and salaries that they have extra money to spend on baby-killing, then let them give their money to Planned Parenthood. My money is for providing for my (future) babies, and paying for their graduate degrees. If I have to pay for other people’s plans to kill babies, then I can’t pay for my plan to raise them.

“You cannot legislate the poor into freedom by legislating the industrious out of it. You don’t multiply wealth by dividing it. Government cannot give anything to anybody that it doesn’t first take from somebody else. Whenever somebody receives something without working for it, somebody else has to work for it without receiving. The worst thing that can happen to a nation is for half of the people to get the idea they don’t have to work because somebody else will work for them, and the other half to get the idea that it does no good to work because they don’t get to enjoy the fruits of their labor.”

– Adrian Rogers, former President of the Southern Baptist Convention

And a quote from Michael Medved:

The only real alternative to government as a source of assistance, authority and a functioning civil society remains the “little platoons” described by Edmund Burke — families and communities shaped by attitudes that count as both economically and culturally conservative.

Abortion will be severely restricted abortion providers realize that there is no money to be made by killing innocent people. That’s why we need to stop paying them our money.

Note that Susan G. Komen For the Cure and United Way also fund abortions. Be careful where you give your money.

Neil Simpson has a round-up on this topic here.

Related posts on Republican bills

Related posts on Planned Parenthood

What happened when Chile privatized its retirement program?

Map of South America
Map of South America

Here’s an editorial about how Chile privatized their government-run retirement program.

Excerpt:

Nearly 30 years ago, on the very day Ronald Reagan was sworn in as U.S. president, Chile became the first nation to privatize its social security system. Three decades hence, it has surpassed all expectations.

[…]Thirty years on, Pinera’s plan, adapted from the ideas of Milton Friedman, is, along with free trade, one of the two pillars of Chile’s success story, surpassing all predictions.

Pinera’s proposal began with scrapping the payroll tax on the country’s social security system and inviting all workers to take the money they were contributing and move it into a private pension.

Workers would be free to choose the fund, how much to put in, and at what age they would retire, with a minimal safety net built into the design. Past contributions would be refunded to workers by government bond. And anyone who didn’t like the idea was free to remain with the system as it was. It was a huge success: 95% of Chile’s workers chose the private system.

Pinera told the public to expect a compounded 4% rate of return under the private plan. But as of 2010, the average annual rate of return was 9.23%, far higher than promised.

By contrast, the U.S. social security system, which today accounts for a quarter of the U.S. government budget, is slated to give retiring workers in the next decade a 1% to 2% rate of return. And those entering the system today will see a negative return.

Chile’s implicit pension debt fell to just 6% of GNP — compared with 100% in the U.S., 300% in France and 450% in Italy, leaving Chile with no net debt.

Better still, the accumulated savings in the pension funds fueled Chile’s spectacular economic ascent, taking real incomes from about $4,000 per capita in the early 1980s to $15,000 today, and GDP to the 6% range most years for nearly 20 years. With that record, is it any surprise that Chile this year earned itself a membership card into the club of rich nations, the OECD?

The U.S. could have similar result if it had started on Chile’s path 30 years ago, with no debt and a phenomenal rate of growth.

But U.S. politicians, just like Chile’s fascist generals, have insisted the public is too stupid to fend for itself without big government. Given U.S. politicians’ fraudulent mismanagement and abuse of Social Security in recent years, such claims are outrageous.

And it even works in Canada – they privatized their air traffic control program.

Excerpt:

In 1996, Canada privatized its air traffic control system, in part due to the long waits endured by passengers. Today, it should take the same approach to improve its miserable health care waiting times.

Canada’s air traffic control might not have been a major embarrassment — though its health-care system might be — but it was performing poorly enough that policymakers felt they had to do something about it. So they sold it for $1.5 billion.

In turning over its air traffic control system to Nav Canada, the country relieved itself of a multitude of air travel issues.

Lengthy delays have been minimized, flight times have been cut, circling while awaiting a landing slot has been decreased and routes are more efficient. The overall flying experience has improved as has the business environment for airlines.

According to a Christmas Eve story in the Financial Post, privatization of the air traffic control system has “cut the fuel bill of airlines flying into Canada and above it by an estimated $1.4 billion collectively.” Nav Canada “estimates it will be able to save airlines a further $2.9 billion on fuel by 2016.”

At the same time, the private company, which does not operate through a command-and-control arrangement like a state-run system would, has kept airlines’ landing fees stable “and in some cases, like in 2006,” even reduced them.

Taxpayers have benefited. The system is no longer being propped up by $100 million to $200 million a year in public funds.

Though Nav Canada is a nonprofit company, it still makes money. Its profits go to pay down debt and are plowed back into the company for new innovations — an incentive that the clumsy government-owned air traffic control system didn’t have.

Why don’t we try things that we know will work – like privatizing wasteful government agencies and social programs? If it works for Chile and Canada, then it should work for us. If massive government spending did not work for Japan, then it shouldn’t work for us, either. Why govern by rhetoric and demonizing the opposition, when we can easily do what has worked for others? They are not really so different from us, are they?