WE Blog

“Is this the best America can produce? Aren’t great crises supposed to bring forth great men?” David Rothkopf of the Carnegie Endowment wrote in a Washington Post commentary. Rothkopf wrote that “it seems that we’ve elected — despite their smarts and earnestness — a government of stumbling technocrats whose solutions either fall short or go too far. It’s enough to make you want to pull the covers back over your head.”
Rothkopf doesn’t just fault President Obama, who he says is still finding his footing. “Gordon Brown is on his way out, Hugo Chavez is nuts and Wall Street management is larcenous. Isn’t there someone somewhere with decent values, a firm hand on the tiller and at least one big new idea? Where have all the leaders gone?”
He added: “Once there were titans running the financial and business worlds, lions of the legislature, great statesmen astride the global stage, individuals who weren’t just victims of history but who bent it to their wills. Or maybe it’s just that people in the rearview mirror appear larger than they really were.”

The proposal to limit the tax deductibility of charitable contributions would likely cause the high-income taxpayers to cut their charitable giving by as much as the increase in their tax bills, which would leave their remaining income and personal consumption unchanged. In effect, the change would be a tax on the charities, reducing their receipts by a dollar for every dollar of extra revenue the government collects. It is hard to imagine a rationale for taxing schools, hospitals, medical research budgets and arts organizations in this way. Many tax features of the Obama budget should be changed to stimulate the near-term recovery of demand and to strengthen long-term incentives for productivity. But the proposed tax on charitable gifts hits at the foundation of our pluralistic society. The administration should recognize its mistake and withdraw this proposal. — Martin Feldstein, economics professor at Harvard University, for the Washington Post

Evidently, the rich still carry influence in Washington, D.C. President Obama’s plan to cap itemized deductions for high-income taxpayers flew like a lead balloon in Congress. It would be a pity if the administration were to forgo that money — $320 billion over the next 10 years to finance a good share of its proposed health care reform. The complaints that capping deductions would kill charity are wrong. It is true that under the proposed changes, many affluent families would not be able to deduct as much for their mortgages, charitable contributions and the like, but that would not amount to very many people. Several studies point out that a large share of charitable donations is not deducted from taxes, and donors in lower tax brackets account for more than half of all contributions that are deducted. Obama is proposing a government that provides more security for Americans and invests in their long-term prosperity. That requires more money. Capping deductions for the 1.2æpercent of Americans who are the most well-off is one good way to raise it. — New York Times editorial