Nancy Pelosi is a terrific contrary indicator. If she hates a piece of legislation or one of President Trump’s policy decisions, you know there has to be something great about it.
So when Pelosi and her left-wing cohorts claim that the recently passed tax reform act portends disaster for the needy, don’t panic. Chances are it will have the opposite effect: economically disadvantaged Americans will benefit from the bill.
And that’s just what is going to happen. It turns out that the tax cuts are expected to increase charitable giving. So the only “disaster” here is that fewer people are going to be dependent on big government and welfare. Hence, the panic among liberals.
The latest alarmist assault on the $1.5 trillion tax overhaul passed in December, which House Minority Leader Nancy Pelosi, D-Calif., called “the worst bill in the history of the United States,” comes from the left-wing nonprofit world.
Liberal groups such as the National Council of Nonprofits claim that the plan will be “disastrous” for charities, resulting in $13 billion in lost revenues for nonprofits and over 220,000 lost jobs.
Orvin Kimbraugh, president and CEO of the United Way of Greater St. Louis, bemoaned an impending drop in charitable donations under the plan in the New York Times. In his words: “This is about people’s lives.”
Now that we’ve been subjected to typical liberal fear-mongering, let’s see what’s really happening.
The thrust of the Left’s argument is that allowing Americans to keep more of their money makes them stingier, and high taxes are needed to force Americans to take advantage of charitable tax write-offs.
It’s ironic that anyone in the nonprofit sector, which is built entirely on the generosity of individuals and corporations, can argue that higher taxes encourage charity – or that charity needs to be legislated.
For the true liberal, everything must be government-regulated.
But to the point at hand, what impact do tax rates have on charitable giving?
Above all, if the Left’s argument about tax incentives is true, we should see sharp declines in charitable donations after every tax cut in U.S. history. We don’t.
According to a 2015 report in the Chronicle of Philanthropy, individuals’ charitable giving rose four percent in 1965 and more than two percent in 1966, following the Kennedy and Johnson tax cuts of 1964 and 1965, respectively.
Between the Reagan tax cuts in 1981 and 1986, individual giving rose a whopping 21 percent from $119.7 billion to $144.9 billion. By 1989, individual giving grew another 4.7 percent.
The Bush tax cuts tell the same story. Between 2001 and the 2008 market crash, individual giving grew by nearly 15 percent, one of the largest eras of growth in the history of American philanthropy.
So, the Trump tax plan will not cause the sky to fall. In fact, it should result in non-profits seeing increased donations, with more money available to help the needy.
There is one down-side to this, though. If the left had their wits about them, they’d deal in facts rather than wild emotions. And the fact is that they stand to benefit, too.
If anything, the Left will benefit from increased charitable donations. In April, Charity Navigator, a nonprofit monitor, reported that donations to politically active left-wing groups – including the Southern Poverty Law Center, Planned Parenthood, and the Environmental Defense Fund – had risen by 500 to 8,000 percent. Imagine the increase this year, when Americans have more money to give.
The tax cut plan was the right thing to do because it is sound economic policy. And that’s true even if the left benefits.
Source: Washington Examiner