Tax increases are coming. It used to be that when tax increases were mentioned, charities could ignore that news. Not so today.
Just recently, I penned an article called “Short Term Recession or the Long Winter—Rethinking the Theology of Money” in The Christian Research Journal. There, I talked about how, among other factors, rising tax rates would begin to seriously impact the revenue of charities around the country.
Not long after the article came out, President Obama’s Health Care Bill was passed and not long after the articles started to come—tax increases are coming. And not just any tax increases. Large ones. In the long term we could talk about 60-70% of income kind of tax rates. There’s a quick tendency to think that those tax rates will just be pushed off to the “rich.”
But even the pundits are realizing that the tax bite will reach to the middle class and even the lower income levels. It will have to.
And the impact of those tax rates? Less disposable income. Less money to give. The money that might have been given to charity will be given (involuntarily) to the government. And let’s not expect government to be a willing benefactor; they are going to be quite busy figuring out how to pay for Social Security, Medicare and Medicaid particularly now that the outflow of those entitlements exceeds the inflow.
It’s time for charities to read the news of the time with compelling insight.
William High is the President/General Counsel of the Servant Christian Community Foundation. He speaks, teaches and writes on issues related to giving, generosity, and non profits. He may be reached at email@example.com.