Budget
FOXBusiness reports on the affects of the president’s proposal to lower the charitable deduction.
Rick Dunham, CEO of Dunham & Company, notes “How much of a hit could charities across the country take? $5 billion… Part of the challenges, I think, charities are facing right now is they’re coming off of two years of a decline in giving to charities, 2.7% decrease in 2008 and a 2.3% decrease in 2009… About a $12 billion hit, so it’s huge.”
Here is a video of an interview last Friday on charitable deductions in the president’s budget: Charitable Deduction Video
Further Reading
Washingtonpost op-ed by Michael Gerson
Michael Gerson criticizes President Obama for his use of the itemized deduction cap to finance government spending at the expense of the non-profit community, the roots of his career.
Gerson notes: “During the last budget cycle, some defenders of this proposal argued that a tax on giving would help the nonprofit sector by funding greater health coverage, which would relieve pressure on nonprofit social service providers. With health reform now on life support, this bank-shot justification is even more absurd. The Obama administration is left with one argument: that the federal government would use the money gained from this tax better than would the private sector. The president is welcome to make this case, but he can no longer simultaneously claim to be a champion of the nonprofit world. This proposal indicates not only an ideological enthusiasm for expanded government but also a disdain for civil society.”
Further Reading
Charitable tax deduction is back on the chopping block
The President released his FY 2011 Budget this morning. As part of this new budget, as we expected, President Obama again proposed to limit the itemized deduction, including the charitable deduction. The proposal would limit those who earn over $200,000 (singles) and $250,000 (couples) annually to a 28% itemized deduction cap (versus the 33% and 35% rates currently applied to these taxpayers). Unlike last year, however, the funds raised from this proposal would go toward reducing the deficit; last year, the revenue raised from the limitation was set aside for health care reform efforts.
ACR will be carefully monitoring these issues in the coming weeks. While the President’s Budget proposal does not carry the force of law, it does provide a blueprint for Congress to consider when they put together their own budget in the next few months.
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