On July 1, 2010, Governor Linda Lingle vetoed a tax bill that would have capped itemized deductions for higher income individuals including deductions for charitable contributions. HB 1907 would have resulted in tax increases of $140 million over the next five years and helped to close the state's budget gap.
Governor Lingle rightly argued, however, that limiting the charitable deduction would hurt charities. As she put it, tax increases not only impact taxpayers, "but also disicentivizes activities such as charitable giving."
Non profits and charitable organizations that depend on contributions to serve needy populations are particularly concerned that their ability to raise funds through donations and charitable giving would be adversely affected.
Especially during these recessionary times, the governor said, the government ought to be encouraging charitable giving rather than penalizing it.
Our community is still feeling the impacts of the recession and this is the time when we want to encourage donations to charitable organizations, not enact laws that hinder them.
Good for governor Lingle and the State of Hawaii. Now it's your turn, New York.
As Scott Walter put it in his post last week:
What kind of people would try to balance an obese budget on the backs of charities whose revenues are shriveling thanks to the recession and government budget cuts, while their expenses grow heavier with greater demands for aid?