Now that there's serious talk of capping deductions from both sides of the aisle, all sorts of interest groups are up in arms trying to carve out exceptions. I'm not privy to which K Street firms are collecting the largest fees from whom, but I hear an awful lot of noise about the impact on charities.
Donations to organizations that are ideological in nature are not tax deductible — except when they are. I am not allowed to deduct my contributions to the ACLU, for example, because defending First Amendment rights is, presumably, "political." Okay, I can live with that. We ACLU members cannot deduct our contributions, but guess what? We keep on giving.
One third of all deductible contributions in the United States go to religious organizations. I imagine some portion of those contributions goes towards feeding the hungry and clothing the naked and such like. I know that a substantial part goes to proselytizing and missionary work, and I can't see how converting a sucker from one set of cockamamie beliefs to another is any sort of public good. Tax deductible contributions also are used for agitating on political issues like abortion, contraception, gay marriage, suppression of competing religious practices, etc.
Will members stop donating to their religious organizations if their contributions no longer are tax deductible? I doubt it — not if they want that afterlife they've been promised.
Then there are the religiously and ethnically affiliated "social welfare" organizations, many of which operate commercial enterprises like bars, bowling alleys, and catering halls. Paying your tax deductable dues to those gets you cut-rate booze, a convenient place for your Thursday night poker game, and a less expensive venue for your daughter's wedding. Similar non-sectarian groups provide many of the same benefits, but serve primarily to provide ocassions where local businessmen can hobnob and arrange business transactions. Yes, such groups do involve themselves in charitable work, but nobody joins for the tax advantage.
People who donate to medical charities usually are motivated by having known someone who suffered with the illness to which the charity is dedicated, not by a tax deduction. Also, I'm pretty sure rich people will continue to pay to see their names featured on bronze plaques in the lobby of the ballet or outside the hospital emergency room, not to mention engraved on the lintels of university buildings.
Frankly, I don't think capping (or even eliminating) the deduction for charitable contributions would have much impact at all — but if charities having a little less to spend means I'll stop getting all those useless address labels, it's okay with me.