"While the response to hurricane Katrina has uncovered failures of government at every level - federal, state, and local - it has also revealed again the amazing generosity and effectiveness of America's private charitable efforts."

Tanner is right in giving kudos to the great works that groups like the Red Cross and the ASPCA are doing to help people and animals that are victims of Hurricane Katrina.

He also gives props to corporations that are opening thier wallets. "American business is doing its part, too. Wal-Mart, so reviled by the American left, not only donated $20 million in cash, 1,500 truckloads of free merchandise, and food for 100,000 meals, it promised a job for every one of its displaced workers no matter where in the country they end up. At least 90 corporations have donated at least $1 million each, many far more than that. Many companies in Louisiana and Mississippi have promised to continue paying their workers, even if their stores or businesses were wiped out."

However, his article continues on to advocate against the government as a first reponder. More of like a second responder.

Why?

"[P]rivate charity has long been recognized as more effective and efficient than government welfare programs. Local churches and community groups are the best positioned to understand the needs in their respective areas, and can direct money or services to where they are most useful. Private charities are generally far more flexible than government agencies, which are frequently bogged down in red tape and regulations."

While nonprofits may be more flexible than government entities, it does not mean that the government - at any level - should abstain from their responsibilty to protect its citizens. In New Orleans, the people depended on the government to ensure the levees were in place, work, and would be adequately maintained. But the government failed them. And now the Red Cross must clean it up.

On August 31, President Bush implored people to make donations to the Red Cross. And people did - to the tune of 1.06 billion dollars. But when disaster strikes, we should not have to rely on the generosity of individuals that are living paycheck-to-paycheck to begin with.

The nation's charities have done a stunning and stellar job after Katrina. But the government shouldn't shirk their responsibility just because the American people are willing to open up their hearts and their wallets.

Posted by Jennifer Lowe, 11:23:34 AM



FBI Investigating Katrina Web Scams
"FBI Director Robert Mueller said Wednesday that the FBI has launched 31 investigations of websites that may be falsely claiming to raise money to help victims of Hurricane Katrina," USA Today reports. "Mueller said the FBI, with the help of legitimate relief organizations, has checked out 3,000 of 4,600 websites that are soliciting donations to help displaced people."

Posted by Jennifer Lowe, 08:50:43 AM



Katrina Tax Legislation Sent to Bush
"A $6.1 billion tax-relief bill to aid in recovery from Hurricane Katrina cleared Congress, amid laments over the deficit but no clear direction from Republicans beyond creating World War II styled bonds to finance the debt from the disaster," the Wall Street Journal reports. "The House gave its approval on a 422-0 vote, and the Senate sent it on to President Bush for his signature last night without a roll call."

INCENTIVES FOR CHARITABLE DONATIONS:

• Encourages cash donations by individuals. Under current law, individuals may deduct charitable donations up to 50 percent of their adjusted gross income. Deductions for charitable donations are further limited by the phase-out of itemized deductions. Under the proposal, cash donations to charities are exempt from the 50-percent income limitation and the phase-out of itemized deductions if the donations are made before January 2006.
• Encourages cash donations by corporations. Under current law, corporations may deduct charitable donations up to 10 percent of their taxable income. The proposal waives the 10-percent income limitation for cash donations related to Hurricane Katrina if the donations are made before January 2006.
• Modifies tax treatment when using a personal vehicle for charitable work. Under current law, individuals may claim a tax deduction for the costs associated with using a personal vehicle for charitable work. The deduction is calculated by using a mileage reimbursement rate of 14 cents-per-mile. The reimbursement rate for business use is set periodically through IRS guidance and currently stands at 48.5 cents-per-mile. The proposal sets the mileage reimbursement rate for charitable contributions at 70 percent of the standard business mileage rate. If the individual is a volunteer and is reimbursed for the use of the personal vehicle, the proposal ensures that the individual does not have to pay income tax on the reimbursement. Both provisions are effective through December 31, 2006.
• Encourages charitable donations of food inventory. Under current law, C-corporations may deduct the cost of food inventory donations. The value of the deduction is equal to the lesser of two times the basis or basis plus one-half of the added value. The proposal extends the current-law deduction for food donations to S-corporations, partnerships and sole proprietors through the end of the 2005 calendar year.
• Encourages donations of educational books to public schools. The proposal allows a charitable deduction through the end of the 2005 calendar year for donations of educational books to public schools. The value of the deduction is equal to the lesser of two times the basis or basis plus one-half of the added value.

The IRA Rollover has been jettisoned. For a summary of the legislation that has been sent to the president.

Posted by Jennifer Lowe, 08:45:05 AM