Snappy newsletters. Simple Facebook sharing. Spirited comments. Sweet features are waiting… GET THEM NOW!

Philanthropists Cry Foul Over Obama Budget

Higher taxes, cap on deductions may lead to $4B less in charity

By Jason Farago,  Newser Staff

Posted Mar 10, 2009 9:19 AM CDT
Email

(Newser) – Charity may be a virtue, but in America there's another motivation for philanthropy: generous tax deductions of as much as 35%. Barack Obama's proposed 2010 budget may change all that; not only will it raise taxes on the most wealthy to almost 40%, it will cap charitable deductions at a 28% rate. The double whammy has angered the world of philanthropy, already suffering from slowed contributions—and as NPR reports, the change might not make it into the final budget.

A study by Indiana University estimates that tax changes could decrease donations to nonprofits by $3.8 billion a year. Max Baucus, chair of the Senate Finance Committee, said that the new rules "raise concerns," and Tim Geithner recently acknowledged that changes might be made. One accountant acknowledged that the groaning philanthropists are far from selfless: "In spite of the press that says things are not going to change, that people are motivated by goodwill, my clients mainly give for tax purposes."

President Barack Obama speaks about his fiscal 2010 federal budget, Thursday, Feb, 26, 2009, with Budget Director Peter Orszag, right, and Treasury Secretary Tim Geithner.
President Barack Obama speaks about his fiscal 2010 federal budget, Thursday, Feb, 26, 2009, with Budget Director Peter Orszag, right, and Treasury Secretary Tim Geithner.   (AP Photo/Charles Dharapak)
President Barack Obama in the East Room of the White House in Washington.
President Barack Obama in the East Room of the White House in Washington.   (AP Photo/Ron Edmonds)
Copies of President Obama's first budget for fiscal 2010 are picked up at the US Government Printing Office in Washington, Thursday, Feb. 26, 2009.
Copies of President Obama's first budget for fiscal 2010 are picked up at the US Government Printing Office in Washington, Thursday, Feb. 26, 2009.   (AP Photo/Pablo Martinez Monsivais)
« Prev« Prev | Next »Next » Slideshow
To report an error on this story, notify our editors.
A snapshot of the day's best news stories.
 
COMMENTS
Showing 3 of 8 comments
Guest
Mar 19, 2009 4:42 AM CDT
Don't worry, charities, the government intends to use that money to fund education, healthcare, childcare, housing, and jobs for the poor and middle class. That's your constituency, also, right charities? All's good.
Guest
Mar 11, 2009 3:21 AM CDT
Churches are one thing, but a whole lot of so-called charitable, tax-exempt organizations are all about avoiding taxation and using the money to push a political agenda that only benefits the few-taking tax dollars away from public works and plowing them into pushing reactionary agendas.
riffran
Mar 10, 2009 6:16 AM CDT
remember taxes are patriotic....so that logic carried out a bit would infer that only the rich are patriots. Because if you make under a certain amount, and do not have to pay in at all , due to tax credits and personal exemptions and kids ect.......YOU ARE NOT PATRIOTIC.......now we all no thats BS....but then again so is punishing those who have worked hard to get where they are, and have become succesfull.....it's always the boo hoo cry of "Your rich because of the people you stepped on and exploited". Forcing the "haves" to give up what they have earned and giving it those that don't earn it, is communism or socialism pure and simple....and yes there are some out there who have exploited others unethicaly to get rich, and that is wrong also. The drop in charity is just a symptom of the greater disease process

Two views on the future of philanthropy

The economy, not Obama, will kill charity
Wall Street Journal Subscription

Obama is strangling charity at a critical moment
Politico

 
philanthropy • Barack Obama • budget • charity • nonprofit • tax code • charitable giving

More Newser Stories

Obama Unveils $3.8T Budget, Targets Rich

Virtual Swear Jar Turns Your Potty Mouth Into Charity

US First in Charity Index

Obama Steps Into Budget Talks

Americans Gave More to Charity Last Year
NEWS FROM OUR PARTNERS
Other Sites We Like:   24/7 Wall St.   |   Betty Confidential   |   BuzzFeed   |   Cracked   |   Fark   |   Timelines   |   The Frisky   |   Geek Sugar   |   NewsOne