OPINION
8
Philanthropists Cry Foul Over Obama Budget
Higher taxes, cap on deductions may lead to $4B less in charity
By Jason Farago
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Posted Mar 10, 09 9:19 AM CDT
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(Newser)
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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."