Ken’s Take: We were on this one early last week. O’s strategy: nationalize funding of NFPs … let government, not individuals, decide which charities are worthy.
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Excerpted from WSJ, ” The Charity Revolt Liberals oppose a tax hike on rich donors”, March 10, 2009
Among those shocked by President Obama’s 2010 budget, the most surprising are the true-blue liberals who run most of America’s nonprofits, universities and charities. How dare he limit tax deductions for charitable giving!
They’re afraid they’ll get fewer donations, but they should be more concerned that Mr. Obama’s policies will shove them aside in favor of the New Charity State.
His budget proposes to raise the top personal income tax rate to 39.6% in 2011 from 35%, and the 33% rate to 36% while reducing the tax benefit from itemized deductions for the top two brackets to 28% from 35% and 33%, respectively. The White House estimates the deduction reduction will yield $318 billion in revenue over 10 years.
Some worry that the tax change “could be a disincentive to some donors.”
In 2006, Americans gave $186.6 billion to charity, more than 40% from those in the highest tax bracket.
A back of the envelope calculation by the Tax Policy Center, a left-of-center think tank, estimates the Obama plan will reduce annual giving by 2%, or some $9 billion.
Americans of all income levels have long given generously, notably in the 1980s as income tax rates fell and the economy boomed. Over the last five decades, American giving overall has hardly deviated from 2% of personal income
The White House may have underestimated the power of the liberal nonprofit lobby. The charity deduction cut is the only one of the President’s many tax increases that Democrats on Capitol Hill have publicly criticized. Politics hath no fury like a rich liberal scorned.
Full editorial:
http://online.wsj.com/article/SB123664427493678121.html
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