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When I posted about The New Yorker hit-piece on the Koch brothers yesterday, I noted that it was odd to see leftists rush to attack the concept of ideological philanthropy given that 1) as the piece concedes, the Kochs have personally given millions to non-political causes, including $150 million to MIT and cancer research, and 2) that leftist funding is one giant octopus of connections to moneyed leftists like George Soros and Tim Gill.

Of course, Keith Olbermann, Rachel Maddow, and Al Gore all stepped up to criticize the Kochs as if this wasn’t the case. Lee Fang, employed by the Soros-bankrolled Center for American Progress, even tells Olbermann he’s writing a book on the Kochs. No conflict of interest there!

The fact is that the left is desperate for their own Soros of the right. The Scaife money is long gone, and Rupert Murdoch’s donations stay in the million dollar range, not the hundreds of millions. The vast majority of organizations on the right today run on donations from middle class America, not from top-down sources. The left needs someone like caricature of the Kochs they create to exist, just so that they can point to them as an example of the real money behind everything that’s happening. They desperately want to believe that someone, somewhere, used ill-gotten money to create the Tea Party movement out of thin air.

The problem, of course, is that none of this is true. The Kochs are very unique individuals — anti-communist libertarians, not establishment conservatives — who give to very specific projects, and are open and consistent about those projects. Where Soros is said to now run his funding through a shell game of other foundations and organizations (where donation A directly correlates with donation B) to keep his name out of it, recognizing how toxic his association is — witness the comments we got on my prior post from a Center for Public Integrity spokesman, trying to offset the Soros funding with less-hot button names on the left.

There’s another, deeper undercurrent as well — a social factor which longs for the top-hatted Republicans and the upstart Democrats, a formulation that hasn’t existed for more than a decade. As David Paul Kuhn noted a few weeks ago:

Affluent Americans are Barack Obama’s most secure class of support. They have stuck by this president at three to six times the rate of all other income groups since early 2009, based on a RealClearPolitics analysis.

It’s a familiar story that wealthy voters have moved toward Democrats in recent years. But the remarkable steadiness of Obama’s affluent support has continued with little notice. The national media has instead heavily covered Obama’s tepid flings with populism.

You would think Obama’s rich support was running to Republicans. It’s not. Wall Street money has recently come to favor Republicans. But in broad terms, the affluent Obama vote has barely cracked. Obama’s approval rating has plummeted by 24 percentage points among those with a household income that is less than $50k annually. He’s dropped 13 points within the $50k to $100k bloc over the same period. And he’s fallen 17 points within the $100k to $150k bloc.

What about those households with income exceeding $150k? Obama has merely declined 4 points, based upon Gallup polling from February-March 2009 (after Obama’s honeymoon ended) to June-July 2010.

Let’s face it, Democrats: you’re the party of the affluent now, whether you wanted to be or not, and trying to turn the Kochs into lightning rods won’t change that. It’s no fun to be The Man? Tough.

In the interests of full disclosure: I’ve never been paid, trained, or taken funding from the Kochs. The Heartland Institute, my current employer, has never received funding from either of the Koch brothers, and hasn’t received funding from any of the organizations or foundations in the extended Koch family in over a decade.

Follow Ben Domenech on Twitter.

Why does Barack Obama seem so committed to using tax policy to discourage people from doing the right thing with their money?

It’s not just the AIG bonus provisions which penalize those who donated or gave back their bonuses. It’s the President’s continued refusal to acknowledge the very real ramifications of the tax policies he supports on American philanthropy, offering no help to important charities at the financial breaking point.

Mike Allen of the Politico posed the question to President Obama in his prime time press conference the other night (not to be confused with his online presser today), a question prompted in part by the major pushback from some Democrat Senators and a wide-ranging portion of American charities: “Are you reconsidering your plan to cut the interest rate deduction for mortgages and for charities? And do you regret having proposed that in the first place?”

After discussing the Bush tax cuts’ expiration, Obama answered in part:

OBAMA: People are still going to be able to make charitable contributions. It just means, if you give $100 and you’re in this tax bracket, at a certain point, instead of being able write off 36 or 39 percent, you’re writing off 28 percent. Now, if it’s really a charitable contribution, I’m assuming that that shouldn’t be a determining factor as to whether you’re given that $100 to the homeless shelter down the street.

And so this provision would affect about 1 percent of the American people. They would still get deductions. It’s just that they wouldn’t be able to write off 39 percent. In that sense, what it would do is it would equalize — when I give $100, I’d get the same amount of deduction as when some — a bus driver, who’s making $50,000 a year, or $40,000 a year gives that same $100. Right now he gets 28 percent — he gets to write off 28 percent; I get to write off 39 percent. I don’t think that’s fair.

So I think this was a good idea. I think it is a realistic way for us to raise some revenue from people who benefited enormously over the last several years. It’s not going to cripple them; they’ll still be well-to-do. And ultimately, if we’re going to tackle the serious problems that we’ve got, then in some cases those who are more fortunate are going to have to pay a little bit more.

Q: But it’s not the well-to-do people, it’s the charities. Given what you just said, are you confident the charities are wrong when they contend that this would discourage giving?

OBAMA: Yes, I am. I mean, if you look at the evidence, there’s very little evidence that this has a significant impact on charitable giving.

Charities aren’t buying the President’s answer, and with good reason. As I cited before in my piece outlining the war on philanthropy, the evidence on this argument is mixed at best, and at worst, it can be very bad for charities that operate on long-term educational or health issues. As Alex Brill and Phillip Swagel outline in The American, looking forward shows that President Obama’s tax proposal would reduce charitable donations by $125 billion over the next decade:

The tax hit on charitable donations is sizeable—a 20 percent increase in the cost of giving to charity for high income taxpayers. According to projections from the nonpartisan Tax Policy Center, $50 billion in charitable donations will be made by taxpayers that would be affected by the Obama proposal if it was enacted. Recent economic research finds that among higher-income taxpayers, a 1 percent increase in the after-tax cost of a charitable donation reduces contributions by about 1 percent. This means that the Obama proposal would reduce charitable donations by roughly $10 billion in 2011 and by $125 billion over ten years. To put that in context, $10 billion is the combined annual private support to The United Way, Salvation Army, American Cancer Society, Food for the Poor, YMCA of the USA, and Feed the Children.

And looking backward at the numbers, the Center on Philanthropy at Indiana University outlines the President’s disagreement with the facts:

The Center looked at how giving would have been affected in 2006 (the latest year for which itemized deduction data are available) if the Administration’s proposals for charitable gift deduction rates and personal income tax rates for taxpayers with income above $250,000 had been in effect at that time. The Center estimates that the two changes combined would have resulted in a reduction of total itemized giving by the highest income households of 4.8 percent in 2006, or a drop of $3.87 billion in itemized contributions by those households. Total itemized giving by households in the highest income categories in 2006 was $81.26 billion.

Now it’s possible of course that accepting the modest prediction of a drop of roughly 5% of American giving, a little under $4 billion, or even accepting the more expansive $125 billion over ten years figure, just is not viewed by President Obama as a “significant impact.” He does, after all, deal in billions and trillions when it comes to bailouts and budgets. But imagine for a moment where these cuts happen. It’s not as if everyone on the giving side of the class structure gives in the same pattern, just with a 5% haircut: instead, they give less, and they give to fewer organizations. Those charities that do some of the most important long-term work are often those that suffer as people reprioritize based on the immediacy of need. And those needs are only growing:

Sixty-two percent of charities have less than three months’ worth of cash on hand to cover costs, and just 16 percent expect to be able to pay for their expenses this year and next.

Many of those nonprofit organizations “were not necessarily robust going into this,” said Clara Miller, president of the Nonprofit Finance Fund, which conducted the study. “And now they’re virtually all seeing a future increase in demand for their services while they have a tightening cash cushion.”

Sen. Chuck Schumer and other Democrats who apparently understand this matter a bit better than the President are aghast at the idea of raising taxes on charitable giving at a time of economic turmoil. That’s one of the reasons he and several fellow Democrats introduced a bill this week to ease the tax burden on foundation giving, which could come to function as an olive branch to the philanthropy community.

It still boggles my mind, however, that the President believes the government should take a greater chunk from money – money which, if it is not donated, need not be subject to this tax – intended to help others. Shouldn’t he be all about encouraging wealthy Americans to give their money to worthy causes? Why does he want the tax man to rob the train before it arrives?

Perhaps he just has a very different view of the purpose of American generosity. Consider another controversial issue at the moment: the National Committee for Responsive Philanthropy’s report demanding all charities assign half their grants to racial minorities and the poor.

The report, released this month by the National Committee for Responsive Philanthropy, argued that foundations should meet a handful of benchmarks to practice “philanthropy at its best,” including making half their annual grants to “lower-income communities, communities of color and other marginalized groups, broadly defined.”

Several foundation leaders have called that benchmark overly prescriptive and argued it could exclude philanthropies that pursue missions such as the arts, medical research and education — areas that might not always directly affect the groups identified by the committee.

Requiring member organizations to do this would doubtless receive support from some corners — but it would also drastically hurt organizations who are focused on issues completely unrelated to the inner city and don’t have any attitude toward minorities. Writing at the Huffington Post, influential foundation president Paul Brest was blunt about it: “Even for someone who shares NCRP’s concerns about marginalized communities, its hierarchy of ends is breathtakingly arrogant.”

Is cancer an issue where racial political quotas should come into play? Are museums? What about heart disease, or higher education, or saving the whales or the rainforests? The Philanthropy Roundtable created an organization, the Alliance for Charitable Reform, to respond. The head of one well-known international non-profit had this response:

Many of the responses to the NCRP recommendations begin by paying lip service to diversity. Diversity, in and of itself, is neither good nor bad. We should have space in our philanthropic vision for non-diverse charities, perhaps those exclusively focused on issues affecting minority communities or particularly countries of the world. How about a supporting organization for the Harlem Boys Choir? The NCRP view of the world begins with the perspective that one-size fits all and we must be brow-beaten or even coerced into following a formula given to us from above. I prefer the Tocquevillian vision of philanthropy that begins in the communities of America and works its way up spontaneously, without being forced into a stultifying prescription handed down by elites who think they know better than the rest of us folks.

Perhaps, at heart, that’s what President Obama’s tax policy on charitable giving is all about. Less money being given by individual Americans to support causes they believe are important, more money for the government being given to support causes and organizations that President Obama and his administration believe are important. It’s easy for him to say that there will be no “significant impact” on giving or society because of this, but perhaps that’s just because his ideology is based on the idea that whatever the problem, government can address it better. It’s an ideology that fosters an America that doesn’t focus on empowering leaders within free communities, but on creating a nation of many followers, trailing behind the leadership of the tenured bureaucrats of Washington, their generosity mandated by the government.

At its worst, President Obama’s answer the other night suggests that he thinks this issue is about wealthy Americans complaining about higher taxes, instead of being willing to consider that it’s actually about how giving by the wealthy affects everyone else. He argues that marginal changes won’t affect giving because they shouldn’t, not because he has the evidence to support this statement. As we’ve seen repeatedly in recent years, in the context of tax, crime, and welfare policies, people do respond to marginal changes in incentives, especially economic incentives (to work or not work, to invest or not invest) whether or not we wish it should be so.

Perhaps the President was just being glib to a reporter with a nagging followup question. But if the President’s answer was indeed honest, and an indication that he actually believes this is how the world works, it is a sign that we have elected a man to the White House who — for all his eloquence before the masses — has a distinct lack of understanding of the balance of government and human nature. And this is a profoundly disappointing thought.

It is therefore our business carefully to cultivate in our minds, to rear to the most perfect vigour and maturity, every sort of generous and honest feeling that belongs in our nature. To bring the dispositions that are lovely in private life into the service and conduct of the commonwealth; so to be patriots, as not to forget we are gentlemen. -Edmund Burke

The policy steps President Barack Obama has taken thus far are, for the most part, the predictable decisions of a center-left administration. A few of his cabinet choices have offered surprises — as much for the White House staff, it appears, as for the populace – and a few of his positions on national security have ruffled the feathers of those who expected the lost presidency of George McGovern. But other than that, his first month in office has much in common with Clinton: high partisanship, high expectations, a rocky start but some success. The government spending has been greater in volume, and continues to rise at a startling rate, and Obama’s health care policy (which many observers even in his own party still can’t quite grasp) is an open question — but this is not a president who seems eager to seek out extremes. Instead, he wants to demonstrate that his government is in touch, open, and transparent before the American people.

What’s more, if there has been one consistent theme of Barack Obama’s young presidency, it is an unending call to give — and not just to his campaign coffers. It’s a call he reiterated in his non-State of the Union address, to engage in acts of self-sacrifice small and large. His entire message on class and the country is predicated on it. To be sure, his economic policies demand wealthier Americans be more generous to others through the redistributing mechanism of government, but it’s not just that — there’s a genuine call to service that ran through his campaign’s rhetoric that has continued in a slick new Ad Council campaign.

While President Bush talked a good game on volunteerism in his early days as part of his compassionate conservatism message, his call to service was hardly unique or uniquely successful — whereas if Obama can persuade even a portion of his most enthusiastic young supporters to take up the cause of volunteerism, he could make a massive and lasting impact.

So the question is: why, in a time of such economic need, in a time that calls for generosity and charity, has Barack Obama decided to use his budget to actively declare war on philanthropy?

I asked the president of a prominent international non-profit to comment on Obama’s new policies, and he was convinced there was no question as to the White House’s motivation. “This is a frontal assault on the non-profit sector aimed at undermining alternatives to government provision of social services. Nobody likes competition, and that goes for those who think government is the answer to all our problems.”

The Wall Street Journal describes it in fairly simple terms:

The tax increase is a new proposal from Mr. Obama, and would limit deductions for filers in the 33% and 35% tax brackets.

Under current law, taxpayers who itemize calculate their deductions based on their income tax bracket. A taxpayer who pays a 35% rate on his income may deduct 35% of various expenses — such as mortgage interest or charitable contributions — from his taxable income.

Under the Obama proposal, these deductions would be limited to a maximum of 28%, even for taxpayers paying higher tax rates.

Essentially, Obama removes any tax incentive for individuals to give at the levels they have in recent years, an effective declaration of war on every major nonprofit in the country that survives primarily on individual giving — particularly thinktanks and private academic institutions. Foundation giving is already ravaged thanks to the poor economy (and if history is a guide, it’ll get worse before it gets better) — Jewish philanthropy in particular is hurting thanks to Bernie Madoff — now this new policy would wreck the tax incentive for charitable giving as well.

The good people at the Chronicle of Philanthropy were stunned by the news:

“It seems like unusual public policy to try, as the President announced to the Congress this week, to return the United States to world leadership in access to higher education and then make it more difficult for extraordinary donors to contribute great gifts to colleges and universities,” Mr. Flessner said. “Likewise, it seems like unusual public policy to penalize the great medical centers that contribute so much to scientific breakthroughs by making it more difficult for donors to make the six-, seven-, eight-, and nine-figure gifts.”

The ridiculous nature of this policy is that it would strike a blow against those who were generous — those who give nothing to charity will experience no tax increase whatsoever. And while it’s true that many people support philanthropic causes without considering the net cost after the charitable deduction, giving people a reason not to give in a time of crisis is almost always a bad idea.

We all knew that Obama’s enormous spending intentions would need an offset in the form of a tax hike — and most of us assumed the majority of that cost would come in the form of a tax hike on the rich. But why in the world would you place a tax hike on the money the rich were planning to give away? It’s a decision that at the very least, President Obama must explain.

>> Now this is interesting – the latest research from Barna on tithing: “Not surprisingly, some population groups were more likely than others to have given away at least ten percent of their income. Among the most generous segments were evangelicals (24% of whom tithed); conservatives (12%); people who had prayed, read the Bible and attended a church service during the past week (12%); charismatic or Pentecostal Christians (11%); and registered Republicans (10%). Several groups also stood out as highly unlikely to tithe: people under the age of 25, atheists and agnostics, single adults who have never been married, liberals, and downscale adults. One percent or less of the people in each of those segments tithed in 2007.”