Limiting Deductions on Charity Draws Ire

[Fire_Medic_Dave]

Wealthy donors and the nonprofit groups they support were in an uproar over the Obama administration’s proposal to limit the value of deductions for charitable gifts, which was included in the budget the president presented to Congress.

Among donors, the concern was one of being forced to limit donations when charities need the support the most.

Charity trade associations echoed the unease. Nonprofit groups have been urging the administration and Congress to increase incentives for charitable giving by raising the limits on deductions and eliminating taxes on the investment income of foundations.

“In these hard economic times, we need to make sure tax and regulatory policy encourages growth in philanthropy,” said Steve Gunderson, chief executive of the Council on Foundations.


http://www.nytimes.com/2009/02/27/us/27charity.html




I think this is a horrible idea.

David

[madrchsod]

1. i`d say it would be a disaster for our society

[Fire_Medic_Dave]

2. I can't imagine the justification.

[kirby]

3. Here is the justification...

A middle income person gives $1000 to charity. Their tax break is $150. A wealthy individual gives the same $1000. Their tax break is $350.

They want to change it so that the the deduction is limited to the 28% tax bracket. Therefore, the wealthy individual would have a $280 tax break. I have no problem with this. Both people should be giving because they want to help a worthy cause, not solely due to the tax break.

In reality, this already occurs today due to the AMT (Alternative Minimum Tax). This is not really as big of an issue as people are making it out to be. If you read the article you will see that a survey showed only 7% of wealthy people would change their giving if the tax treatment changed.

[kirby]

4. .

[Hello_Kitty]

6. Thank you. eom

[Fire_Medic_Dave]

7. I'm heavily involved with a non-profit dog rescue and 7% to us is a lot.

[Hello_Kitty]

5. Where was all the crying about charities when they were repealing the estate tax?

Non-profits - churches, social service organizations, colleges, hospitals, etc., have lost BILLIONS since Bush implemented the gradual repeal of the estate tax. Wealthy people have traditionally used philanthropic trusts to avoid paying it and have had less of a need to do so. Reinstating the estate tax would more than offset any losses to charities due to capping the deduction.

Besides, while private charity plays an important role in society, it is no substitute for a social safety net. It's the ultimate free market, allowing people with money to pick and choose which "unfortunates" they will deign to bestow their largesse on. Neither does it build infrastructure or create good-paying jobs. The purpose of the stimulus is to do that and if it means that rich people don't get to write off their entire contribution to their favorite charity, then so be it.