Washington – For the third time in three years President Obama’s proposed budget will attempt to reduce tax deductions for high-end charitable donors, and for the third time nonprofits and religious organizations are pushing back.
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Many religious nonprofits, which supplement their budgets heavily with donations from wealthy donors, are concerned that reducing the tax write-offs for charitable donations will cause a decrease in giving, said Diana Aviv, the president and CEO of Independent Sector, a coalition of nonprofit organizations.
Obama’s proposed budget for fiscal year 2012 includes a 30 percent reduction in itemized deductions for high-income taxpayers. Individual donors making more than $200,000 or families earning more than $250,000 would be able to claim 28 percent of any donation as a tax deduction rather than the current 35 percent.
That would mean that a wealthy taxpayer who donates $10,000 to a charity would be able to only claim a $2,800 deduction on his taxes, rather than $3,500.
Obama has defended this reduction several times, most recently at a White House press conference on Feb. 15.
“When it comes to over the long term, maintaining tax breaks for millionaires and billionaires, when that will mean additional deficits of a trillion dollars, if you’re serious about deficit reduction, you don’t do that,” Obama said.
The Union of Orthodox Jewish Congregations of America is a vocal opponent of Obama’s plan.
“The proposal to reduce the rate of tax deductibility for contributions is a recipe for disastrous displacements and cuts in much-needed nonprofit sector institutions and services,” Nathan Diament, the union’s director of public policy, said in a statement.
Read full article in Beliefnet.com (blog)
This is very likely to pass: While Obama wants to reduce the deduction from 35% to 28%, the Republican plan (by Congressman Ryan) would eliminate it completely.
obama the liar just said he did not raise taxes of course not just keep eating away deduction [tax raise] and everything else. I hope Americans are not stupid and reelect this liar. Worst president ever ever
Maybe the Obama and the Republicans do not give Charity!! Maybe they do not know the meaning of the word. Some very wealthy people give very little charity.
neither the republicans nor democrats know what to do. when the deficit is so large and people are complaining, the government will use its power to reallocate resources away from private institutions to itself. too bad.
Uhm, do the math. In the example given of the $10,000 donation there is a $700 difference in the deductable amount, right?
Now, I’m not sure exactly what the highest bracket is these days, but suppose its 35%. That means we are talking about (.35)*700 = $245 difference in that guy’s tax bill. If the highest bracket is 40%, the difference is $280.
Does anyone really thing that $280 difference will be the difference between giving and not giving that 10 grand? Of course not. I’m not sure how much this change will raise, but a bad idea its not. Geeps.