RIGONOMICS:

This ailing economy affects all of us in some way or another. For some it is a time to tighten your belt and make sure you do not spend what you do not have. To others it may be a more drastic cut in spending, especially if there has been a large drop in income because of a job loss in the family. To the poorest of us it may be a complete financial calamity.

With zero income and all savings depleted, some may find themselves on the street without a roof over their head. This last Sunday, the Pilot finished publishing City Editor Paul Anderson’s two-part story on the homeless. It was a very thoughtful story about those among us who, for whatever reason, do not have shelter.

He concluded there were three different categories of homeless. The first is related to either drug and/or alcohol dependence, which may also have mental illness issues. The second are more of the anti-social types who do not want to be part of a structured society; some may also put them in the mental illness category. The last type are people who, because of economic tragedies, ended up out in the street; a breadwinner in the household losing a job, small business owner whose business closes, leaving them without any income and very small chance of getting a job in the ever-shrinking job market.

This last type of homeless situation is becoming more prevalent in today’s economy. I spoke yesterday with Jean Wegener who runs Costa Mesa-based Serving People in Need. Wegener is calling it the “quiet siege” when discussing the first-time homeless who are people through no fault of their own lost a job at a downsizing company.

“We are seeing people that previously had six-figure incomes, coming to us for help because they are now out in the street,” Wegener said.

For many of these first-time homeless, friends and other family members were keeping them off the streets, but are now finding themselves unable to give financial support.

Which brings me to the meat of this column: the Obama administration’s latest effort to collect more taxes by taxing “wealthy families” — those who make more than $250,000 per year, on any donations they make to charity. In one of the administration’s most bizarre twists of logic and sense of fairness, they do not think it is fair that a person in the 15% tax bracket only saves 15% on the taxes they pay when they donate to charity when a family in the 39.6% bracket saves 39.6% on the taxes they pay on the money they give to charity. Forgetting the fact that giving to a charity is completely voluntary. Bottom line: The Obama Administration does not like the fact that it loses tax revenue on charitable giving.

Giving to charities has always been indirectly supported by our government’s tax policies. The thinking has always been that private charities deliver services to the poor at a fraction of the cost of what any government agency could. To that end, as a society we have agreed that any money donated to a charity would simply not be taxed. If you give $1,000 to a charity, you do not pay taxes on that $1,000. In the Obama Plan, starting in 2011 if you give $1,000 to a charity and you are in the highest tax bracket (39.6%), you will only be able to deduct the donation from your taxable income based on being in the 28% tax bracket. To put it more simply, for every $1,000 donation you make, you will have to write an additional check to the federal government for $116. Yes — the government is taxing high-income families 11.6% on every dollar they give to charity.

Mesa Verde resident Larry Haynes, who is executive director of the nonprofit Mercy House, said this policy of taxing charitable donations is a “disastrous mistake; at a time when nonprofits are struggling to keep the ever-growing population of homeless off the street, we do not need anything that would hinder the private sector from donating money.” Mercy House, like Serving People In Need, has successful programs that take homeless families off the street and teaches them the skills they need to make themselves self-sufficient. It takes coaching, counseling and a lot of tough love to get the homeless on the road to becoming self-supporting members of society. Full Disclosure: I have been on the board of Mercy House for several years.

During these trying times I remind myself of the phrase, “There but for the grace of God go I.” Do not forget the charities that not only help the poorest of the poor, but also help society by making those same people valuable contributing members of society. Donations are expected to be off this year for both Mercy House and SPIN OC. You can give to both at www.mercyhouse.net and www.spinoc.org.

JIM RIGHEIMER is a Costa Mesa planning commissioner, a local developer and a GOP activist. He may be reached at jim@rigonomics.com.