Would taking away charitable deductions be a nonprofit disaster? Fox News’ Stuart Varney interviews Earle I. Mack on what capping or getting rid of the charitable deduction might do to non-profits. Watch the full video below or on their website.
Stuart Varney: Limit it. Our next guest says that would be a terrible idea, Earle Mack former chairman of the new York state council on the arts. So welcome to the program, good to have you with us.
Earle Mack: Good morning, how are you today?
Stuart Varney: I’m pretty good, now if you get to restriction on the charitable tax deduction, or it’s eliminated, I understand that charitable contributions would probably go down. I can see that happening. But doesn’t that imply that the whole reason for giving to charity is to get a tax break as opposed to supporting the good that that charity does.
Earle Mack: That’s a misnomer. So many people think of that we’re giving something to the rich and the wealthy. By giving them a tax break. Well firstly the charitable sector is all one point nine trillion, I repeat, a one point nine trillion dollar industry it’s five and a half to six percent of our economy. And charitable organizations like the Salvation Army, the Red Cross, United Way- for example United Way- point 9% of their contributions are over $10,000. 15% of their budget.
Stuart Varney: I got it. I understand what Mr. Ambassador. I understand that charity is big. And I understand that a tax deduction is an incentive to give to charity.
Earle Mack: Look at the services.
Stuart Varney: I know it’s for good, I see that. Should we be- see what I’m trying to get at, if it’s just to get a tax deduction, that detracts from the motives to be charitable. Doesn’t it. It’s not so much a good thing, it’s just a tax break.
Earle Mack: Well it’s been this way for over a hundred years and it works. And I think that giving is God’s gift. And if you get a tax break and are incentivized to help the homeless, to help the poor, to feed the hungry, that’s a good thing.
Stuart Varney: OK, I just want to hold on for a second. You say that charitable giving is a one point nine trillion dollar industry now let’s suppose that the charitable tax deduction was eliminated completely. What do you think that number would go down to? One point nine trillion to what?
Earle Mack: Well I think it will go down more in proportion to the cuts because charitable organizations are very very cautious and facing their revenue go down by, say, 10% then they’ll cut back 20%.
Stuart Varney: Give me a number. I mean, if it’s one point nine trillion and you eliminate the tax deduction what does it come down to? A trillion? Or less? I mean give me an idea.
Earle Mack: Well I think that’ll elimination would probably cut it in half.
Stuart Varney: Whoa. Mr. Ambassador, I’m sorry I’m out of time but that is a dramatic number. I don’t think many people expect the deduction to be completely eliminated but if you did to cut in half would be a very serious thing.
Earle Mack: And if you capped it it would go down by 30%.
Stuart Varney: Wow. Okay that’s important stuff Mr. Ambassador. You were a former ambassador to Finland, that’s why I address you as Mr. Ambassador. Thank you very much for joining us sir. This is a very important subject.
Earle Mack: Thank you for having me.
Stuart Varney: Okay Sir. Thank you.