President Obama is set to reduce itemized deductions to the wealthy. Itemized deductions would include areas such medical expenses, gambling losses, and mortgage interest expenses incurred on a second home, and charitable contributions as explained in the short video above. I agree that itemized deductions might be an easy way to target the wealthy but it would reduce charitable contributions. I feel like the small tax incentive makes all the difference for some people and taking it away could change attitudes surrounding giving. If certain charitable donations were taxed then there would be less distinguishing 501(c)3 organizations from 501(c)4 organizations. It would tax those making $250,000 or more. However, I feel like most people amass their wealth, then they choose to donate later in life; it may not hurt charitable contributions as much as we think. It really renews the debate on whether the non-profits or the government should provide services as they often provide a duel function. Addressing the tax system as a whole, President Obama was quoted saying, “For too long we have tolerated a tax system that’s a complex, inefficient, and loophole-riddled mess". He addressed issues such as the deficit making the simple point that we are spending more money than we are taking in. We can continue to finance our debt by selling government securities but this puts programs such as social security in jeopardy. The current system just places a greater burden on the next generation and we must have more people paying into the system each generation. It is creating a bubble that will eventually burst as current policy is not sustainable. The question is really who to tax and how to do it. Many look at the estate tax as it is unfair as it creates inter-generational injustice and contributes towards creating a class system. However, there are a number of issues with this tax, are you going to take away someones family farm or property that has been with the family for years? It seems that a number of loopholes would surround any type of estate tax and no law would ever pass congress that would greatly increase this area of tax.
El-Erian, author of when markets collide, brings up the point of the United States is having staggering levels of growth while the emerging markets are growing rapidly. The United States has a misalignment of jobs to skills which could prove harmful in the future. It seems somewhat unclear the role that educated people in the United States will play, perhaps more will choose to go abroad for work. It seems that most jobs that are high paying are science related. The article made the point that there was not a huge reduction in charitable contributions during the economic downturn. It was stated how the role of social services can end up preventing problems that are costly to society. Drug addiction, criminal behavior, and illiteracy among others.
The conservative right and religious critics often ruin good things. I feel like it was justified for these art foundations to withdraw contributions from the Smithsonian. Art often takes on a greater role than aesthetics. It is art that tackles a number of social issues, enhances culture, and touches on just about every aspect of the world we live in. If something appears crude then one can simply advert their eyes. Using our own Jordan Snitzer Musuem of Art, there have in the past been displays considered to have adult material, simply they displayed this separately. It seems that removing an exhibit all together just places boundaries on what is deemed acceptable. We need to break away from traditional norms and take on more progressive attitudes in spheres such as art. Non-profits are really able to influence this through their contributions which have a great amount of influence as there is a continued need for money. Taking into consideration the goals of these foundations was likely a lesson learned by the Smithsonian.
I really enjoyed reading the article about the Mulago Foundation regarding the effectiveness of non-profits. This organization does not simply dish out money but rather asks for data that will prove the money is well spent. Money is often squandered with non-profits but the Mulago foundation only gives to those that show that they have made an impact thus maximizing results. There is accountability with these organizations that doesn't always exist. Our guest speaker spoke about his organization regarding basketball in South Africa where much of the money they received was rather a photo-op; he said that they preferred lasting relationships where they can work with funders to create lasting results. They received a basketball court at one point but there were was no funding afterward to help maintain the facility. He did however say that it was at times difficult showing impact as gathering data is not always possible but it was still overwhelmingly important to foster some kind of relationship with these organizations.
