In a document outlining his 2010 budget plans, President Obama proposed limiting the value of the tax break for itemized deductions, including donations to charity, to 28 percent for families making more than $250,000. In other words, taxpayers would save 28 cents on their federal income taxes for each dollar donated.
That would reduce by as much as 20 percent the amount wealthy taxpayers could get in tax breaks. Under the current system, taxpayers who are in the 33 percent or 35 percent tax brackets use that rate to claim deductions.
The president says the proposal on itemized deductions — which would also apply to claims such as mortgage interest — would raise $318-billion over 10 years. That money would help pay for a 10-year $630-billion reserve fund designed to help make health care more affordable and available.
After reading this article, it made me wonder if wealthy Americans, who often donate large amounts to charity, will still continue to give at the rate they have been giving. Do you think that this proposal will have a negative effect on non profits? When you donate, in whatever income category you are in, how important is getting a tax deduction in your decision to help a charity?Karen Maunu
Associate Executive Director
Love Without Boundaries