WASHINGTON, D.C.— For the fourth time the President’s budget has devalued private giving by proposing a limit on the charitable deduction. The Alliance for Charitable Reform (ACR) and others in the nonprofit sector have repeatedly opposed this proposal because it will diminish a strong incentive to give to charity.
The proposed limit on itemized deductions would reduce the value of the charitable deduction to 28% for families with incomes over $250,000. This would likely result in a drop in private giving. The President has included this in all of his budget proposals and twice as a revenue raiser for other priorities. Also included are recommendations for tax reform, including the “Buffett Rule”, which would significantly change the tax structure for higher income earners.
“The President is sending mixed messages to the charitable community. On one hand, he wants to limit the charitable deduction. On the other, he wants millionaires to continue to give to charity while also paying higher taxes. ACR believes, and many others in Congress agree, that we should encourage and incentivize private charitable giving,” said Sue Santa, senior vice president of The Philanthropy Roundtable. “Charities are being forced to do more with less. The charitable deduction encourages people to give and now is not the time to experiment with it. We are hopeful that through this budget process, President Obama and leaders in Congress can come to an agreement that both encourages philanthropy and is good for our country”
While the President has repeatedly proposed a limit on the charitable deduction, the budget proposal announced today also included the “Buffett Rule” as one of his principles for tax reform. The Buffett Rule would raise taxes on millionaires and eliminate all deductions, except the charitable deduction. While ACR acknowledges that the President signals an appreciation for this charitable giving incentive in the “Buffett Rule” provision, it is concerned about the broader implications the proposed Buffett Rule would have on an individual’s discretionary income. Less discretionary income would likely equal less charity.
ACR is a project of The Philanthropy Roundtable. It represents charitable donors and organizations and serves as a leading voice on support for philanthropic freedom, increased charitable giving and opposition to legislation or regulatory proposals that could limit a donor’s right to choose or diminish private giving.
For more information about ACR contact Alison Hawkins at firstname.lastname@example.org or at 202-822-8333.
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