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Hillary Clinton, the current frontrunner for the Democratic Party nomination for President of the USA, put forward a plan that could cost the nonprofit sector billions of dollars in voluntary donations.
Like President Barack Obama, Clinton announced that she would seek to impose a cap on tax deductions, including the deduction for charitable giving.
On the campaign trail, Clinton proposed the “new college compact.” At a town hall meeting in New Hampshire on Monday, August 10, Clinton announced a plan to reduce the cost of four-year public schools, make two-year community colleges tuition-free, and cut student loan interest rates.
To pay for the $350 billion plan, Clinton would seek to impose the same 28 percent cap on itemized deductions that we have seen in Obama’s proposed budgets. Charitable deductions are not exempt from this plan. Currently, taxpayers may claim up to a 35 percent charitable deduction.
When Obama proposed a similar tax policy, the Charitable Giving Coalition issued the following statement:
Any caps or limits on charitable giving will have a devastating impact on charities and nonprofits. If donors have less incentive to give to charities — donations will decline, impeding the important work nonprofits do for the millions of Americans who rely on them. For example, up to $5.6 billion in charitable giving would be lost each year if the President’s proposal to cut the charitable deduction were enacted.”
Like the Obama plan, the Clinton proposal would also negatively affect charitable giving. Nevertheless, “Clinton aides believe their plan will help build enthusiasm for her candidacy with younger voters,” according to an Associated Press report.
The cynical effort of the Clinton campaign to buy the youth vote reminds me of two quotes from Alexis de Tocqueville, the 19th century philosopher and historian: