The Obama jobs bill…creates a new battle between the charity world and government.
There’s a lot of commotion surrounding President Obama’s jobs bill. Small businesses, for one, are lukewarm since their concern is less for tax-breaks and more for actual revenues. But the biggest detractors so far may just be charities and those that give to them: the bill proposes eliminating some of the deductions for charitable giving amongst high earners.
The jobs bill comes out to a $447 billion price tag, and much of it would be paid for by limiting the tax deductions for charitable giving amongst top earners making $200,000 a year or more. Currently, these earners can deduct 35 cents on the dollar, but if the bill passes as written that rate would drop to 28 cents. In fairness, this simply equalizes things so that top earners have the same deductions as lesser earners, but in the end it also effectively limits total donations to charity and makes a favored practice of many top earners that much more difficult. Indeed, the amount of money in question, 7 cents for every dollar, adds up to the staggering amount of $467 billion over 10 years, according to White House estimates. If you give to charities of your own selection, then this will be an important development to follow for the sake of your charities of choice and to anticipate your upcoming tax liabilities.
Reference: The Wall Street Journal (Spetember 13, 2011) “Why Obama’s Jobs Bill Could Be Bad For Charity”
Tags: charitable deductions, Charitable Giving, jobs act, Obama