Top of the Ticket

Political commentary from Andrew Malcolm

« Previous Post | Top of the Ticket Home | Next Post »

Are charitable contributions really at risk under Obama budget?

Adding machine tape

It is the buzz of the philanthropy world, news that President Obama's fiscal 2010 budget blueprint cuts tax deductions for charitable donations (and other items) for Americans in the top income brackets.

While some fear a falloff in donations, others are asking about motive. Would wealthy Americans really stop giving to charities if their deductions were reduced?

Under the president's plan, itemized tax deductions for charitable giving and mortgages would be capped for those earning more than $250,000 a year. Changes would be phased in gradually over the next few years. So in 2010, instead of getting a 33% or 35% deduction for charitable donations, Americans in the top income brackets, according to a Wall Street Journal analysis, would get somewhere in the neighborhood of 28%.

In the Obama budget, the cuts on tax deductions for upper-income Americans -- coupled with cuts in government spending -- are projected to help raise $634 billion for a kind of big federal piggy bank that would be used to extend health coverage to the more than 47 million people in America who are uninsured and subsidize premiums for others who can't afford what they have.

Critics are already voicing concern that charities, hard hit by a decline in donations because of sinking stock prices on Wall Street, could suffer further. House Majority Leader Steny Hoyer (D-Md.), the No. 2  Democrat in the House, said the potential loss of philanthropic giving is "clearly one of our concerns." And CNBC's Maria Bartiromo said on MSNBC's "Morning Joe" today that the Obama blueprint comes with "such unintended consequences" and said of charitable donations, "Get ready for those to go off a cliff."

But as Marc Ambinder of the Atlantic put it, "If wealthy people want to give money, then they should give, regardless of tax benefits." Suggesting that the wealthy should not use charities as a tax dodge, he added, "If tax reform down the line were to gut all deductions, would charitable contributions totally dry up?"

-- Johanna Neuman

Register here for Twitter alerts on each new politics Ticket item. RSS feeds are available over here. And we're now on Kindle as well.

Photo: Getty Images

Comments () | Archives (22)

The comments to this entry are closed.

Not surprising since the amount the Obamanians contributed only a scant 1% of their income over the past 5 years while "Bozo" Biden's amount of contributions doesn't measure as statistically significant.

The Obama budget blueprint is a recipe for disaster when it comes to charitable giving. I understand the need for more tax revenue given the budgetart pressures but for goodness sake, why penalize good people? While any giving should not be motivated by the tax benefit, there should be no surprise that the level of giving will be affected by this. I have to say that the idea that those of making around $250K per year and living in Southern California are wealthy is absurd. When is there going to be some type of geographic adjustment for the cost of living and why not add a few more tiers to the tax code and make the selfish rich ones pay more in taxes. Most of those types are already benefiting from government bailouts anyway, right?

The deduction you get for charitable giving isn't as much as what you give, so it hardly counts as a tax dodge. However, it does increase the amount by which a person can give.

It seems a sad statement that one of the things we're willing to sacrifice in this country is charitable contributions. This tax increase will not hurt the rich, but it will hurt the poor during this recession when they already have the most to bear.

Maria knows that Obama plans for the economy suck!

Obama is doing it on hopes that donations will decrease, so more and more people will go to the Government looking for a handout.

If the purpose of the tax cut on charitable contributions is to provide funding for the uninsured, why don't lawmakers / Obama look at changing the Insurance Laws so insurance companies would be required to provide free health insurance or at significantly reduced rates to a calculated number of people. Develop a program similar low-income housing models found in many cities. This tax cut proposal will reduce overall charitable donations and end up hurting many charitable organizations. It's like putting a band on and not fixing the real problem.

why do you give in the first place? I give 10% of my income regardless of what my income is. So you give to charities because you know you are going to get a tax break? The cut he is considering is 5% for people earning over $250,000. So if you give 10% that is $25,000 taxed at 33% $8250. we are talking about $1000 less back to you. $1000 back to social programs that have been neglected for 8 years, that increase the quality of life of poor people and their children. The same groups that I think you intended to give to in the first place. But if you call that socialism and you give for the tax break, then do the math and give less. Then take that extra $1000 and go into a poor neighborhood and give it directly to a poor family. Give me a break. I am happy to give more and then trust that my president, this president, is true to his word and government will be more transparent and our tax dollars won't be wasted or used to fund illegal wars that don't even hit the federal budget .

Perhaps the charitable tax deduction reminds people of the needs of others. Right now, I have the choice of selling or donating a piano. At 74, I have lost 1/2 of my invested savings (from $40K to $20K). I need the money, so I need to sell if I can. Alternatively, a tax deduction would give me some lesser amount of money (back on my taxes), while the donation would be a benefit to the youth of my community. I cannot afford to simply "throw away" this asset, even for a good cause, as I would be doing if I donated it with no tax deduction.

Seems to me that by drecreasing the tax benefit of charitable giving it will mean less benefits for people receiving charity.
The benefits they are currently getting from charity will be replaced by a new government program to satisfy their needs,
This will make this group now under the control of the government instead of the private non profit sector as the government will now be the entity providing the benefits.
Isn't that what Obama wants??

Are we surprised? Just part of the overall totalitarian plan for liberal fascism. Read Karl Marx.

Reducing charitable contributions chokes the lifelijne of churches... and the plan cannot tolerate freedom of religion any more than it can the right to bear arms or the right to free speech. Once the "fairness doctrine" is allowed to censor opposing views, and the guns are collected by the Obama SS troops, the churches can be closed by the government.

Sad really... makes me wonder why I served my country in the military and honored its flag. Bloodless coup by the mindless masses. Sad... very sad...

I guess it isn't hard to believe as Obama has already flushed many of his first picks due to the underpayment of their taxes. Why not start by collecting the monies due from those who owe.

Barry is barking up the wrong tree. To raise revenue, all he has to do is create more cabinet positions for limousine liberals, who will conveniently remember all the taxes they forgot to pay.

How about REDUCING government spending by increasing the charitable deduction so much that it eliminates the need for government social wlefare altogether? This could be accomplished by giving a 100% tax credit for every dollar of charitable giving up to 10% of income. Best of all, Americans will be able to chose the charities that do the best job for the most worthy causes.

Isn't it great that President Obama can go to a Basketball game and have a beer while the rest of us meltdown in the U.S. I voted for him, because I thought he would act like us. Having a good time is not what President Roosevelt was doing while things were in meltdown mode in the U.S.

How can he or we criticize businessmen for flying on private jets, when the President has to fire-up Air Force One and fly to Denver to sign a bill. Hey Mr. President, what about Global Warming? Would it really be that bad to sign the bill in the White House? Does it make sense for me to drive or fly all over the place to do things I could do at my work or house. Aren't we trying to teach people to be smarter at this? How about leading by example. After all, GLOBAL WARMING is serious. In addition, it's just not Air Force One that goes on a trip like this. It's 2 Air Force C5A's the day before and Air Force Two the same day as you. All to sign a bill for the evening news.

You've turned out to be like many of the other Politicians I've voted for. Different rules for you, than us voters. I will give you this, your golden tonge is very convincing, but actions speak louder than words, Mr President.

We fell for President Bush for a while, but we figured it out after a while. The way things are going, you look like you're going to be next.

For years religious charities have been some of the biggest providers of health care to the poor outside of government.

Where do they get the funds that they use? You guessed it -- charitable donations. If you take away from the incentive to donate to funds such as the Catholic Little Sisters of the Poor, or the Catholic Relief Servics, or many other services for that matter they will not be able to provide this funding.

In Denver, the Catholic Little Sisters of the Poor just finished a 10 year fund raising to build on a $250 million addition to a downtown hospital that will include a clinic that will primarily handle homeless people. If you had taken away the funds, they could not have done this. If you take away the future funds, they cannot provide this free service.

Get real. Obama is proving himself to be One Big Arbitrary Mistake for America (OBAMA).

I agree with you Bob. The real hidden agenda is the want to replace personal responsiblity, choice, and faith with government. If you reduce the amount people can give to churches that are good stewards of charity, then people will turn to the nanny state strengthened even more with your money.

Local charity is more efficient, accountable, and moral than the nanny state. How condescending the world view of socialists / communists is. THEY know how to spend your money better. What a laugh.

Wake up people. For those of you who's only 5% from rich people...that's exactly how they want us to see it. Liberals want to kill capitalism in baby steps. Much easier to swallow than a massive power grab. They are killing the republic incrementally. "Baby steps's a guaranteed cure!"

Tax dodge? Are you kidding? I'm not sure about the math here.... but from what I learned in 3rd grade, when you give $1,000 away regardless of whether you get to save ~30% on taxes or not, you still give money away with absolutely no financial BENEFIT to the giver. Those that believe charitable giving is a tax dodge are using an pathetic oversimplification of the situation.

Hopefully Obama will hear the outcry against this unfortunate proposal.

More and more it seems that we as a country are giving ourselves to ideas that seem good and are perhaps well intended (more govt help for the poor, more govt regulation, more financial responsibility hung on corporations and the weathy) but are not the ideas that made this country great.

The foundation of this country is freedom - freedom to make something of yourself, freedom to choose what to do with your time, money and abilities, freedom to say what you want and worship where you want; freedom to build companies and to benefit from them; freedom to innovate new ideas, freedom to fail.

Yet, somehow, those who have invested in themselves with education and have innovated, worked hard and benefited from all their effort, these people who have built jobs for others are now the sole targets of government taxation.

I understand that it seems good to tax the rich, but what we are really saying is that you are NOT free to innovate and grow and succeed. All success will be moderated because you must now pay for everyone else who has not invested, disciplined themselves and succeeded.

Isn't it amusing that we all fell for this guy hook line and sinker?
His big pledge was to lower taxes for the poorest and middle class...
Yet, he wants to get rid of tax deductions for charitable giving.
Know which state gives the MOST to charity per capita?
Mississippii... The poorest state in the country.
Heck, some of the wealthiest people (LIKE Obama and Biden) give almost nothing.
So to them up in DC, they likely think all people pooer than they are (which is most of us) can not POSSIBLY give more of a percentage than they do... but we do.
So all you POOR people in MIssissippii that give a lot to your church, you can thank that man who promised you a huge tax break... I am sure you, like me, are spending that extra $13 a week wisely. It sure is life changing isnt it?

This country is slowly being turned inside out. All these changes are turning America like the other socialist nations.

I think the tax deductable donations should be limited to charities that directly help people and not to organizations that say they are looking for a "cure". It is my personal opinion that charitable organizations should be limited. Any charity that says it is researching a "cure" is decieving its donors. They are not looking for a cure they are just looking for a way to keep you alive longer while taking their meds. There is no financial insentive to find a cure because then big drug companies can only sell the product to an individual person once. If they are cured they will not need to take the meds that allow you to live with a disease.

If the President wants the wealth shared, why would he remove the single most charitable incentive for wealthy americans to give ? It appears to me that he wants to take the money and redistribute to his voters. Everything Obama campaigned against could be said about his Presidency as the worst offender.


Recommended on Facebook


In Case You Missed It...

About the Columnist
A veteran foreign and national correspondent, Andrew Malcolm has served on the L.A. Times Editorial Board and was a Pulitzer finalist in 2004. He is the author of 10 nonfiction books and father of four. Read more.
President Obama
Republican Politics
Democratic Politics



Get Alerts on Your Mobile Phone

Sign me up for the following lists: