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Obama Targeting Charitable Deduction to Fund Jobs Bill
Summary
The White House has released details of President Obama's $447 billion jobs bill. The plan proposes to finance the measure by reducing the tax benefit wealthier taxpayers receive from their itemized deductions, including the charitable deduction, to 28 percent. Thus, a taxpayer in the 35 percent top marginal bracket who gives $100,000 to charity will receive $7,000 less in tax benefit than they receive today. Similar proposals have failed in the past and charity officials are now arguing the plan would be counterproductive because reducing the tax benefit of the charitable deduction will reduce contributions to and jobs within the nonprofit sector at the same time the government is seeking to increase employment.
For further reading on this story:
Obama’s Jobs Bill Includes Plan to Limit Charitable Deductions for the Wealthy - Chronicle on Philanthropy
Why Obama’s Jobs Bill Could Be Bad for Charity - Wall Street Journal
Re: Obama Targeting Charitable Deduction to Fund Jobs Bill
I've often wondered why the federal government doesn't consider "tax payment" a charitable gift. Government, as an organization, and government-related organizations register as non-profit corporations. In essence, the structure is non-profit (therefore, exempt from the very tax payment regulations they impose) -- yet, the income received (tax payers dollars) isn't respected as charitable, even though the dollars are intended for the greater good, the common good, that which supports the infrastructure (the fabric) of our country. If tax is to be termed non-charitable, then that which is charitable must be acknowledged as charitable and recognized for what it is - contribution beyond tax contribution. The federal government should acknowledge and give respect to all individuals who care enough to give away beyond what the government is already forcing individuals to "contribute". The tax deduction for charitable giving beyond taxes is a noble way for the government to demonstrate that respect.