Obama's Plan to Reduce Charitable Deductions for the Wealthy Draws Criticism

Chronicle of Philanthropy ^ | Feb 27,2009 | Suzanne Perry

[SeekAndFind]

Some charities and nonprofit experts are worried that President Obama’s proposal to impose new limits on charitable tax deductions for wealthy people would dampen giving at a time when charities are under severe strain because of the recession.

“During the current economic downturn, which has forced nonprofits to do more with less, any proposal which would result in a decrease in private giving will be a disaster for America’s charities, and for those who depend upon them,” said United Jewish Communities, an umbrella group for Jewish social-service charities.

Mr. Obama proposed the new caps on Thursday as a way to finance changes in the country’s health-care system.

In a document outlining his 2010 budget plans, President Obama proposed limiting the value of the tax break for itemized deductions, including donations to charity, to 28 percent for families making more than $250,000. In other words, taxpayers would save 28 cents on their federal income taxes for each dollar donated.

That would reduce by as much as 20 percent the amount wealthy taxpayers could get in tax breaks. Under the current system, taxpayers who are in the 33 percent or 35 percent tax brackets use that rate to claim deductions.

[Ev Reeman]

People everywhere who depend on church charities and other kinds of charitable organizations and institutions are going to be devastated by these proposals.

Obambi is cutting his own political throat by such acts and it couldn’t happen quick enough for me.

[Ev Reeman]

People everywhere who depend on church charities and other kinds of charitable organizations and institutions are going to be devastated by these proposals.

Obambi is cutting his own political throat by such acts and it couldn’t happen quick enough for me.

[Ev Reeman]

People everywhere who depend on church charities and other kinds of charitable organizations and institutions are going to be devastated by these proposals.

Obambi is cutting his own political throat by such acts and it couldn’t happen quick enough for me.

[Ev Reeman]

People everywhere who depend on church charities and other kinds of charitable organizations and institutions are going to be devastated by these proposals.

Obambi is cutting his own political throat by such acts and it couldn’t happen quick enough for me.

[Lera]

I now only donate money/time/items to go to our troops/vets.

The ones who voted for the mess can learn to live within the means of their food stamps.

[MarkT]

I am conflicted. On the one hand, I want to see a policy that promotes charitable giving but on the other hand, since most of the recipients are populated with Obama supporters, there is nothing like it to see them get their comeuppance.

[PhiKapMom]

IMHO Obama doesn’t care about charities. How much did he donate of his income to charity? He is an empty suit — all talk and someone who wants to redistribute wealth and if it hurts charities, that is their problem.

[Ev Reeman]

Obambi is just another Madoff where charities are concerned.

[PhiKapMom]

Very good comparison to Madoff on charities.

[theBuckwheat]

I'll wager that the charities most affected will be more leftist in orientation, and thus would have cheered on the election of UhBama. I wonder how they feel about him now.

[Ev Reeman]

I was thinking that exact same thing!

[Right Wing Assault]

And I’ll quintuple that!

[lonestar]

A community organizer running the country?—exactly what was expected.

[MediaMole]

then he maybe needs to reexamine his reasons for being "charitable".

At the high end, charity is business. Very few people wake up and decide to donate $100k to the art museum.

Charities have development directors who find potential donors and build proposals to get them to fund projects. These proposals will include the terms of the gift, the project it will fund and show the tax benefits for the donor.

Often these are gifts in the millions involving trusts, donations in kind, matching grants, etc. The tax benefits are a very important part of the calculation.

Also, remember that these gifts are from capital, not from income. That $7000 deduction against an income of $250k represents 10% of their tax bill.

[dhs12345]

Don't worry. Obama has got it covered. He'll pick up the slack with more tax revenues.

... sarc.

[Elsiejay]

And mebbe government should not strive to discouage private acts of charity or to make government the primary agency of charitable good works, using the wealth produced by private citizens.
Socialism has so many faces, so many nefarious ways to diminish the individual citizen.

[richardtavor]

Be’elzebama is happy to steal the contributions of the rich. What does he care about rich folk helping people if he doesn’t get the credit and the votes?

[richardtavor]

Not to be critical at all, but I don't think that you understand the picture, here, saquin. A wealthy person may have $100,000 to donate, but if he is penalized by $7,000, then he may only be able to contribute %93,000 instead of $100,000. Now that would be very little impact to the rich person, but the $7,000 loss to the charity might be devastating to the charity. I don't know about your finances, but you sit down every year and try to budget whether you are rich or not...I personally will try to come up with other giving options because charity is important to me. But I still have limited funds, especially with Obamaziation trying to suck up all the money of our country for government control. Obama is trying to take the control of who to give to away from the person that owns the wealth, and take the power into his own hands. The net effect is that the worthwhile causes that the rich are giving to will be shifted to organizations such as ACORN.

[sgtyork]

You miss the point. Its not about the donor’s reasons for giving. Its the encouragement that the tax deduction provides.

Less economic benefit >> smaller donations >> less well off charities >> BIGGER GOVERNMENT.

Got to think like a socialist.

[lgwdnbdgr]

People everywhere who depend on church charities and other kinds of charitable organizations and institutions are going to be devastated by these proposals.

Obambi is cutting his own political throat by such acts and it couldn’t happen quick enough for me.

Hardly. The "correct" charities will get government subsidies to make up the difference. It's actually a fairly shrewd move on Obama's part as it will help increase dependency on the Democratic Party.