How the 2010 Bush Tax Cuts Are Bad for Giving in 2011 and Beyond
There was much uproar at the end of 2010 about extending the Bush tax cuts with their lower income tax rates, etc. And frankly, there’s little doubt that they had to happen—despite the protests of President Obama and the Democratic faithful. They had to happen because of the sheer will of the populace that, as the November elections demonstrated, needed satisfaction.
However, there’s a disturbing trend at hand. It bodes poorly for our country, the charities which serve our nation’s needy, and the younger generation.
Here’s the sad truth. Our government has approximately 55 trillion dollars in unfunded entitled in the form of Social Security, Medicare and Medicaid. You can debate whether our national debt of some umpteen trillion is stacked on top.
At some point the debt bill must be satisfied. The debt must be satisfied in one of three ways: 1. Cut the budget, 2. Cut the entitlement benefits, or 3. Raise taxes. None is particularly appealing. But our Congress has shown no restraint with the budget so they are forcing themselves into a hole. They are only deferring the pain to our children and our grandchildren. Our children and grandchildren are likely going to face the highest income tax rates in the history of the country.
Not long ago, the leadership in Ireland faced a similar crisis. They took the drastic step and did all three: cut the budget, cut benefits and raised taxes. In so doing, they declared that the standard of living would go down for everyone in the country.
When the standard of living goes down, giving will go down and charities will be affected. Of course, as the standard of living goes down the demand for non profit services will only increase.
We are at a critical time in the history of our country. The leadership of the country needs to take a close look in the mirror and determine if they have the courage to lead and make hard decisions for the long term good of our country.