Obama Tax Plan Would Increase the Cost of Charitable Giving for Wealthy Donors

Obama Tax Plan Would Increase the Cost of Charitable Giving for Wealthy Donors

News story posted in Legislative on 27 February 2009| 49 comments
audience: National Publication | last updated: 18 May 2011
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Summary

The Obama administration has announced in its 2010 budget proposals that it plans to limit the tax rate at which high-income taxpayers can take itemized deductions to 28 percent. For high-income charitable donors, who are subject to higher income tax rates, the result would be a higher cost of giving.

by Marc D. Hoffman

In a comprehensive document entitled, “A New Era of Responsibility – Renewing America’s Promise, the Obama administration has announced plans to cap the tax rate that families with incomes over $250,000 can claim for itemized deductions at 28 percent.

“Reducing Itemized Deduction for Families with Incomes Over $250,000. Lowering health care costs and expanding health insurance coverage will require additional revenue. In the health reform policy discussions that have taken place over the past few years, a wide range of revenue options have been discussed—and these options are all worthy of serious discussion as the Administration works with the Congress to enact health care reform. The Administration’s Budget includes a proposal to limit the tax rate at which high-income taxpayers can take itemized deductions to 28 percent—and the initial reserve fund would be funded in part through this provision. This provision would raise $318 billion over 10 years.” (The entire document can be downloaded at the bottom of this page)

The income tax charitable contribution deduction is one of the itemized deductions that would fall under the provision. Accordingly, high-income donors who are subject to the 33 or 35 percent income tax bracket and who, under current law, would be able to claim itemized deductions at this rate will, under the new proposal, have to in effect subject between a 5 and 7 percent of their charitable donations to income tax.

Example: A couple that is in the 35 percent bracket gives $100,000 to charity. Under current law, (presuming they can deduct the entire $100,000 in the year of transfer under the charitable percentage limitation rules) they will reduce their income taxes by $35,000. The net cost of their gift will be $65,000.

Under the Obama plan, the couple will only be able to deduct their gift at the 28 percent rate, thereby reducing their taxes by $28,000. In essence, they will pay an additional $7,000 in tax for the privilege of making their gift thereby increasing the after-tax cost of their gift to $72,000—a 10.8 percent increase over current law.

And when the Bush tax cuts expire after 2010, it will cost donors in the top bracket of 39.5 percent an additional $11,500 to make a $100,000 gift. This represents a 19 percent tax on giving – not to mention possible implications on state income tax.

It should be noted the Obama plan wouldn’t affect all high-income earners equally. Those who are already subject to the Alternative Minimum Tax and are being taxed in the 28 percent bracket may see no difference in the cost of their gifts.

According to Barlow T. Mann, chief operating officer of the Memphis-based Sharpe Group, the new proposal flies in the face of original congressional intent when the first charitable deduction became law in 1917.

“In looking at the rationale for the original charitable deduction,” said Mann, “the Congress concluded that as a matter of public policy it would not be fair to tax donors for gifts made to charity because they were foregoing any economic benefit from their donation. In addition, the government concluded it was more efficient for individuals to give directly to charity rather than having the government tax individuals and then fund the services provided by those organizations.”

This latter conclusion is backed up by the Urban Institute, which in the early 1980s released a report that concluded that for every dollar lost to the U.S. Treasury by virtue of the income tax charitable deduction, $1.40 of services were returned to the American public by recipient charities.

According to Leland E. Hoffman, president and CEO of the Planned Giving Design Center, LLC, “People generally give what they feel they can afford to give. Accordingly, if a donor in the 35 percent bracket determines they can give $100,000 to charity, under the proposed plan they will probably consult their accountant who, after performing a complicated circular referencing tax calculation, will tell them they can give only $93,500 to the charity of their choice and $6,500 to the government in the form of an involuntary gift.”

“What the Administration has proposed is a plan that imposes additional taxes on the most benevolent in our society. However, the true cost of this plan will be borne by charities that are already suffering from reduced gifts due to the recession.”

A final thought

So what can donors, advisers, charities, and professional associations do? They can all write the Congress and Whitehouse to tell them this is bad law and to have charitable gifts excluded from this provision. And if the measure does pass, donors who are able might consider accelerating their gifts to take advantage of the current rules before the new rules take effect and it costs them more to give later.

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Interesting

I guess my biggest question is: How many people does this actually affect? Yes, this is a shame. Yes, this is unfair...but to how many people. I can't imagine there is a large amount of wealthy families donating over half of their income to charity. Or, am I being too cynical? Roberta Luna

Donating

I am shocked at how many in this thread are trying to justify the governments' foolish course. This course should be labeled SPENDING TO MAKE US ALL POOR. While I could say a lot more, this is enough for realistic persons. PS: I do more donating than many!

Mr. Obama

The policy created will show it consequences in course of time and it depend on how the citizens response it. It seems that the deduction will benefit the average workers most. The government must think about its secure life and also future. regards, WEBMASTER International Travel Health Insurance

Amen, Mr. Weinberg.

Amen, Mr. Weinberg.

Fairness?

Can anyone define for me what "fair" means when someone says that "a person should pay his 'fair' share of taxes"? It seems to me that "fairness" here is merely a political decision. Why is it that when we come to taxes, one person is taxed at 40% of his income and another at 10% and yet that is considered "fair"? Do we expect to go into a grocery store and, depending on one's wallet size, one person pays $1 a loaf for bread while another pays $4 a loaf simply because his wallet is bigger? This idea, however, seems to represent the "fairness" tax view under the Obama administration. As a tax accountant, I can assure you that the wealthy will be giving less if taxed more. Its pure Disneyland thinking if someone thinks that incentives, like tax deductions, do not make a difference when parting with your hard-earned wealth. It doesn't take someone making over $250,000 a year to figure that out.

the voluntary sector will respond

historically, the nature of the public sector and the private sector has varied from administration to administration and from economic era to economic era - but, the voluntary sector has been the sustaining force in our society - deTocqueville's observations are timeless - we are a people that rises to the occasion and finds ways for neighbor to help neighbor, creating organization where none may previously have existed to provide vitally needed assistance. the voluntary sector, funded by millions of generous benefactors of all socio-economic backgrounds and tax brackets, has always responded to challenges put upon the citizens of this country by the public and private sectors - and, there is every reason to believe that the most enduring responses to the challenges presented by these economic conditions and this administration's proposals will come from the voluntary sector, supported by private funds provided by generous people who care about their neighbors - people they may not know personally, but care about nonetheless.

thoughts on proposed cut into tax advantaged charitable givivng

There is still quite a long way to go between the administration's proposed budget to the adoption of a budget that may or may not resemble the one propose - but, that said, even if the proposed cut into the tax advantages of charitable giving were to be adopted - adding $12 to the cost for each $100 of charitable giving for itemizers earning $250,000 and above - it will provide yet another opportunity to demonstrate that tax considerations are not a top factor in the charitable gift planning decisions of affluent and high net worth donors. And, besides - just a thought here - as citizens and taxpayers, there are far greater issues with much more consequential potential outcomes that this new administration has set in motion than the charitable contribution deduction matter.

All or Nothing

Interesting read. As a tax attorney I work with individuals of all means, and disagree that this limitation would have little to no effect on giving. A couple of questions: 1. If the limit on charitable income tax deductions for the "rich" is good for government finances, and will not have a measurable effect on giving, then why not go all the way and remove ALL deductibility? 2. A question specifically for the folks who don't mind higher income taxes - how many of you have included a branch of government amongst the recipients of your giving? If you truly believe that government needs the money, and is putting it to good use - then why not voluntarily give more than your 1040 reflects? And any increase in taxes (whether they be income taxes, carbon taxes, gas taxes, etc.) will filter down to all.

All or Nothing

I am a little late to this discussion, but I think Mr. Kennedy's first observation is on point. I, too, am a tax attorney and deal in real time with real clients who now have less for their personal consumption needs even if viewed as "uber-wealthy" by their neighbors. Ultimately, my charitably inclined clients are concerned about out living their funds, but do view charity as another child. While charitable inclinations do generate the initial discussion and serve as the motivator for action, to discount the after-tax cost of the transfer of value from client to charity seems folly to me. Granted, maybe my clients (whose wealth generally ranges between $2M to $5M) are not the super rich, but they still give. In most cases, tax cost necessarily impacts the amount that the donor is willing to give. As mentioned in Mr. Kennedy's post, if deductibility does not provide any incentive to giving, then a complete removal of deductibility should not affect giving, whether it is "fundraising" or "philanthropy" (the distinction between the two being as clear as mud to me). The difficulty in translating this to the real world lies in the fact that it is unlikely that the charitable deduction will be removed. So, it is speculative. We do, however, have a good example (the inverse of the charitable deduction) in the tax free IRA rollover. Although not identical, it is in many ways, it is similar to an unlimited deduction as the charitable distribution would not be taken into income. If the assumption that I see in this string of comments, that tax deductibility doesn't matter, would not people be willing to accelerate tax related to an IRA to distribute the net proceeds to charity. If tax was irrelevant, and, as in many cases, the IRA represents a significant portion of many donors' funds, wouldn't people be just charitably inclined to give the net? Why is there any concern about extending charitable IRA rollovers if people are just not motivated by tax concerns? Whether it is in the form of a deduction or an exclusion from income, why would it matter, if tax benefits do not incentivize gifting? I don't think I have seen any of my clients accelerate funds from their IRA to make gifts after paying tax. The tax is prohibitive. The inverse, as it relates to gifting after-tax assets and receiving the deduction, is in most cases clearly true. Favorable tax treatment incentivizes gifting. In my world, this is how my donors think. But hey, I don't really have any "uber wealthy" clients for that matter. Most of my clients have worked hard to retire and want to make the smartest, most cost-effective gifts possible.

Douglas S. Delaney, JD, LLM Managing Director CHIRA USA, LLC (843) 815-9777

Exactly

As to point number 2, I couldn't agree more. I've long held that those who would like to stoke the big government fire ought to throw their own fuel on, and leave the rest of us alone. A case in point: Former Senator Mark Dayton (D- MN) is running for governor. His proposal to deal with budgetary issues is to, surprise!, tax the "rich" which he defines as individuals making more than $130,000.00 per year. It should come as no surprise that Mr. Dayton lists his income approximately at that threshold, after taxes and exemptions (never mind that he has untold millions in inherited wealth from the Dayton/Target brand, and was formerly married to a Rockefeller). If Mr. Dayton thinks the "rich" ought to pay more taxes, why is he taking exemptions and deductions? And why not pay more into the treasury?

Economics 101

I work exclusively with wealthy families, and virtually all of these families make substantial donations. For the most part, their donations are made without the tax deduction as the "reason" for making the donation. But this is where many are missing the main economic point. If my client wants to give $1 million, and due to the tax deduction I show them that they can actually give $1.4 million due to tax savings (at 39.6%) and be in the same place from a financial position, they more often then not give the $1.4 million! Guess what happens to the other $116,000 (difference between 39.6% and 28%)...it disappears because now the government will get it! So the charity will get $116,000 less and the government gets $116,000 more...how does that help? It will hurt charitable organizations...and the ones that will be hurt the most are the ones that are dependent on large individual contributions. Charities get a much greater bang for the buck then the government. I would much rather see them end up with the money in the end.

Thinking Like His...

Many of us on this site have worked with wealthy individuals who are not concerned about the deductibility of their charitable gifts. And many of us have also worked with those who could not make the type or size of gift they were able to make without the assistance of the tax code. As for me, I have made a practice of studying the legal and financial implications of the tax law to allow me to develop products to facilitate charitable giving for those who would give more. And I

This is not the first time

"...the first time in our nation

Lee's commentary

Gerald Hundt Financial Development Consultant

Lee, After reading most of the comments, yours makes the most sense. Well presented and very logical, I have recently retired from non- profit work after 34 years and as you know those who work for non profits most often do not do so for the money. As a consultant now, I am seeing the effects every day on NPO's who were already understaffed before the downturn. In my opinion donors who are considering a planned gifts are often influenced by their advisor's suggestions. This new legislation will affect planned giving decisions and have less influence on annual and capital giving. It is only logical that the amount of the gift will be influenced by how much the tax deduction is or is not. More often than not this has nothing to do with the charitable intent, they have already decided to give, it's the amount that will be influenced. Keep up the good work. Gerald Hundt Triangle2 Resource Development Group

Coming Full Circle

Thank you, Mr. Hoffman, for sharing your thoughts and acknowledging our right to disagree. As a sponsor of PGDC, I have always accepted everyone's right to express their views as a given, but it is appropriate to acknowledge it once again. I think, at this point, that we have clearly stated our respective views. My only added observation is that you seem to consider deductibility of charitable contribtutions as a right, dare I say as an entitlement; it is not. The courts have long held that deductibility of contributions and other expenditures can be sculpted and molded as Congress sees fit, so long as they do not violate constitutional principles (such as equal protection); the change under consideration violates no such constitutional precept. So perhaps we are kindred spirits, entitlement hawks as it were, you for deductions for the wealthy, I for social security, health care and public education. Let's hope we and other members of the public can find common ground. Mark B. Weinberg Weinberg & Jacobs, LLP 11300 Rockville Pike Rockville, MD 20852 Voice 301-468-5500 Fax 301-468-5504

It is not the government's money

What gets lost in all these discussions is the fundamental point. The money we are talking about is the money earned by and belonging to private U.S. citizens. The government generates no wealth and has no claim on that money as a matter of right. By taxing people it is taking away their rights to their own money. As the article points out this was a significant consideration in the orignal charitable deduction: that it was both right and more efficient to leave it to people how to donate their own money and to what charities, rather than have the government make those policy decisions. This philosophy is largely dead today, and this proposal is fundamentally a part of the new administration's intent to absorb more and more control at the federal government level, and to make more and more people in need depend not upon themselves, not upon their families, not upon their friends and neighbors, not upon their church or other charities, but upon the government (read the Democratic party). It is all about power and control. It is all about advancing the socilist idea in every aspect, incrementally, at every level.

Where's the patriotism?

Hey Bryan: It's time for all of to step up and start investing in our nation by paying our fair share like Tom Daschle, Tim Geitner, Nancy Kilfeffer, Bill Richardson.... oh, never mind ;)

Is 7% Enough for You

Dear Jerry, I just did my tax returns this weekend, so I can tell you that my wife and I gave approximately 7% of our income to charity; nothing splashy, just the usual. I imagine you gave more, but whatever your contributions, they are worthy of praise and just fine with me. I was particularly proud to be labeled a socialist in your comment, but sad you failed to mention that I am a proud Liberal and card carrying member of the ACLU. Transparancy is important. Mark B. Weinberg Weinberg & Jacobs, LLP 11300 Rockville Pike Rockville, MD 20852 Voice 301-468-5500 Fax 301-468-5504

Obama redistribution of wealth plan

My question to Mr. Weinberg and others who espouse the socialist agenda proposed by President Obama is, how much do you voluntarily give to charity? Statistics plainly show that liberals give the least to charity prefering instead to give other peoples money through the ineffective, unweildy efforts of government. As we travel down this road where someone else is responsible for my needs and that I am owed something more from society than freedom and opportunity, we can say goodbye to the leadership role of America in the world. We will take our place in line with others who still don't get it. Our tax system isn't the problem but the greed and lack of morals among government and business leaders who are selling our freedom for a pot of beans today. Government spending isn't our salvation but smaller, responsible government is the answer. If not, we should all go out and borrow our way to prosperity and leave the debt to our children for their inheritance.

This is One Passionate Thread

Reading over the many passionately argued comments in this thread, I am reminded of two basic assumptions that guide my thinking when it comes to discussions like this (charitable giving). First, to paraphrase an earlier comment, we must not lose sight of the fact that the mission must come first in most endeavors, including philanthropy. Second, and perhaps more importantly, the law of supply and demand can never be side-stepped - if you want less of something, anything, tax it.

Mr. McKay's Comments

A little background. Income accruing to the top 1% of Americans was 10% in 1980. In 2007, it was 21%. Median household income during the "Bush recovery" did not return, much less exceed, the 1999 level. Real wages during the Bush years increased at an annual rate of 1.2%. During the 1990's, it increased at an annual rate of 8.4%. And during the Bush years, the increase in real wages was, of course, for those who had jobs--not for those who lost their jobs. Oh, and one more fact that most conservatives don't like to remember is the way the cost of the Bush wars was managed off the books and built a (guns) deficit that approaches the "butter" deficit Obama is being criticized for. Oh, yes, and there are the tax cuts for the poor "uber wealthy" all the while the the guns deficit was climbing as a result of the Bush wars. How's that for supporting our troops?

Think Beyond Bush

Fred- You offer some good stats. However, Bush is not my guiding light nor is he for most independents like myself, or most conservatives either. I agree that median household Americans are taking a beating, but switching from domination by the Country Club wing of the Republican Party to the Elitist wing of the Democratic Party does not spare us from being bankrupted by both of these groups. Blue collar Democrats and Main Street Republicans and their traditional values are not fully represented at the policy making level. My point is that attacking wealthholders and charities is not the solution. It is just phony class warfare to distract us from the real end game. Big government from a Bush regime is just as bad as big government from the Obama machine . . . especially when it is a rush job under the cover of a national crisis. I pray for more representative government and healthy policy debates. Something is very wrong with how our country is being run both now and in the recent past. Best regards, Joe

The Generous Will Continue to Give ... And Others Can Learn

Bravo to the private sector and nonprofit professionals who responded to this article by shining the light of reality on it. The generous in our society will continue to give, and not primarily for the tax benefit it provides them.

The generous in our society give because they can, it feels good and like the right thing to do. And they learn that their gifts keep on giving, a rippling benefit through society that we need much more of - and is satisfying to see happen. More people can have that experience with encouragement and a better understanding of how to share their gifts, however large or modest, with the world.

Historically consumption (a respiratory illness) was a disease that killed, and its non-medical form still causes sickness. I'm all for wealth and abundance, but what is the purpose of acquisition for acquisition's sake? Knowing what is "enough" for oneself is one of the higher areas of human development. By all means, have a lot, as much as you want, but know what that level is for yourself and then learn to share of yourself - if not your wealth, then your time, your interest, your effort. It's a lot more rewarding.

My two cents.

Dolly M. Garlo, RN, JD, PCC , President, Thrive!! Inc.
www.CreatingLegacy.com

Another Tax On the Poor

The wealthy will not pay this tax, per the article: "give $100,000 to charity, ... their accountant ... will tell them they can give only $93,500" The tax payer is the person on the receiving end of the charities services.

Uber-Wealthy?

Mr. Weinberg's reference to the "uber-wealthy" may reveal a bit of contempt for those who say "enough is enough" to more demands for wealth redistribution from the upper end of our already quite progressive federal income tax structure. Also, if $250,000 is the new threshold for "uber-wealth", it appears that it ain't so "uber" any more. "Uber" may prove to be far less so if Pres. Obama fails in his big gamble that our economy can bear the incredible weight of his tax and spend big big government agenda. If his bet fails, then the inflation that his gamble will engender will push us less "uber" folks up into that not so lofty class. Before too long we will all know who was right on this issue. More on point, what international crisis was Joe Biden alluding to on the campaign trail by suggesting that Obama would be tested early on in his tenure? As too idealistic policies further weaken our financially crippled nation, let's hope that Russia and Iran are not tempted to bait a beleaguered and desperate Isreal into a pre-emptive bombing raid on Iranian nuclear facilities, thereby dragging the whole world (and Obama's rushed big government agenda) into a conflagration that will end all these little tax policy debates. Is this scenario really all that unlikely? Don't be fooled by the "uber" tax policy slogans. The real message is, "Charities be dammed, and full speed ahead for a government that will soon decide which charities merit a tax-exemption (for a mission consistent with government policy) and which charities don't." This concept is alive and well, and was actually proffered some years ago at a prestigious NYU Tax Institute." Uber indeed.

Fundraising vs. Philanthropy

This discussion is a classic example of the difference between fundraising and philanthropy. Fundraising is a set of techniques and processes we use to implement philanthropy. Philanthropy is about creating change in our communities, our society and our world on behalf of those who are vulnerable and do not have the advantages many of us do. When we start to confuse fundraising--and its associated tax benefits--with philanthropy, and do not focus first and foremost on the case for support of our nonprofit organizations (the change for the better in the lives of those less fortunate who share our planet) and donative intent, we have seriously lost our professional way.

Great Distinction

Thank you Fred for this important distinction. Great reminder. Cheers, Dolly

Just My Point

I couln't agree more, Fred. For too long, the sale of tax benefits ahead of program and the use of unrealistic projections to promote gifts has reflected a flawed view that the ends of keeping the charitable sector funded justifies the means of sacrificing honesty, integrity and (in the case of this legislation) sound policy. Mark B. Weinberg Weinberg & Jacobs, LLP 11300 Rockville Pike Rockville, MD 20852 Voice 301-468-5500 Fax 301-468-5504

Call it what you will.

Whether you call it a tax or a "contribution to our government" the bottom line is that this proposal, if it becomes law, will have a negative impact on charitable gifts. It is encouraging to hear stories of persons who's motivation to support charity is not based on the tax benefits they may receive because of their contributions. However, some potential contributors are focused on their charitable deduction and will give less if their deductible amount is decreased. Is our government so selfish in desiring additional tax revenues that it would sacrifice the benefits that encourage support of charity?

Charitable Intent

This is a difficult time for everyone but as someone involved in the nonprofit community, it seems to me charities have suffered more than their share -- less revenue and disappearing endowments resulting in program cutbacks when they are most needed. But I don't think this lessened tax benefit for America's wealthier charitable gifters is in the same catagory as these other setbacks. In my more than 20 years as a fundraiser and fundraising consultant, I have never started a solicitation process (at least not seriously) with "have I got a tax write off for you!" Charitable deductions are an added benefit but not usually the catalyst for charitable intent.

It's time to get real: contributions are not being taxed

"This represents a 19 percent tax on giving..." Income is taxed, not contributions. This kind of prejudicial rhetoric does not help to frame a discussion. Most of the wealthy people I know give little or nothing to charity. They keep their wealth for themselves or use it for purchases of material goods. Many of my middle income clients give relatively significant amounts to charity. I'd call the Obama proposal a nicely directed "contribution" to the nation, especially if it helps us to move forward on solving our health care issues. The call to fight this proposal echoes the past, and ignores the need to find new ways of thinking about our society.

Contributions are not taxed

You've said it perfectly. Contributions are not taxed and the consistency with which our field uses this misleading concept is truly disturbing. An objective framing of the proposal would lead to a much better informed debate.

Patriotism Re defined

For those of us who love our country it is imperative that in this time of need we also consider giving more back to right the wrongs of the past. Indeed Obama did not create this problem, he inherited it. While Charity also needs our help and will continue to get it, there was a 1.3 Trillion Dollar tax cut passed in Bushs first term, money we can now see that never should have been given away. It only makes sense that some of us who enjoyed these breaks in essence getting a free loan, must pay some of it back. I have never focused my giving on the tax deduction and research shows donors dont either. When asked about motivation in giving tax benefits rate last.

Patriotism Re defined

I had to comment on the statement that since Bush over spent on the 2001 Tax Act (which I personally believe was the overall worst Tax Act I have ever seen) that it is now ok to overspend and do what Bush did but worse. Didn't your mother ever teach you that two wrongs do not make a right?

Two wrongs make a right (view of the right !)

I think we need to invigorate the economy and deal with the roughly 8,500,000 who are expected to be unemployed to get things working again. For once we have a transparent budget we can view in advance. Barack was elected on a platform where he said he would raise taxes on those above 250k of income. This is what he is doing, along with a plan to reduce the defecit as the economy recovers. So why is anyone surprised - he is doing exactly what he said he would do and was elected to do which is not a wrong. From your remarks above I am curious how the non grantor CLT avoids the loss of deduction since the income from the lead trust goes to charity, the tiering would often make reportable income in the lead trust lower taxable bracket income anyway. I guess if you placed partnership units into the lead trust and used partnership distributions to make the lead payment it would be income diverted from the taxpayers retrurn thus lowering the taxpayers income. A lot of work and complexty unless an estate planning need is the primary driver and not a charitable giving.

The Robin Hood Presidency

Rob from the rich and give to the poor - and oh yeah, expand government control of the society diminishing liberties all the while. This stinks and should be opposed by all. Charles L Stanley CFP ChFC AIF

diminishing liberties????

If any liberties have been dimished it was George W. Bush doing the dimishing... unless you were one of his buddies... at least Obama is working instead of just enjoying being President. If you do the math you will realize that in the 8 years Bush was President he took 2 years (a full 24 months worth) of vacation time... and what did Bush know about the troubles of America and when did he know? How likely is it that we are all gonna find out? Obama is not robbing the rich... it's just been so long since ya'll paid your fair share you feel like you're being robbed. boo hoo boo hoo

Give me a break...

Wow...you really think the rich don't pay their fair share. That's too funny. Ummm, the "rich" are the only ones paying taxes, or don't you read.

Fair share?

Who gets to decide what is fair? I'm not rich, but I think "fairness" is relative, and whoever happens to be in power decides what "fair" means for the rest of us. "At least Obama is working instead of just enjoying being President." Hahahahahaha.... good one.

Thinking Like His Got Us Into This Mess

The view of Mr. Hoffman, president and CEO of the Planned Giving Design Center, LLC, reflects the world view of Wall Street and the Bush Administration over the past 8 years; people only help others to the extent there is something in it for them. The idea that tax deductions have a push-pull impact on charitable giving, even planned charitable giving, is supported by many studies by the "industry;" but are they accurate in the world we entered last October. Over a professional lifetime working inside and outside of government on fund raising issues, I have made a practice of cutting the tax-hyperbole associated with motivating givers; people are generous enough when told the truth about need, frequently without regard to cost. I believe the Obama proposal is good, hitting a fair balance between the need to raise tax revenues, project a sense of fairness to those in the lower tax brackets and shared sacrifice. For the uber-wealthy who promote lower taxes as an end in itself, I say, how much to you "really" need. Mark B. Weinberg Weinberg & Jacobs, LLP 11300 Rockville Pike Rockville, MD 20852 Voice 301-468-5500 Fax 301-468-5504

Here Here !

Nothing is perfect, but at least Obama wants to bring things back into balance. Henry Ford got it, and paid his people well- Why ? So they good buy his cars. A lesson we obviously are relearning today !

Obama plans to hit charitable giving

I understand the liberal comment of income and wealth shifting from the haves to the have nots, but I just strongly disagree with it and, while I truly hope Obama proves successful, I have serious doubts at this point. I am an EP & Tax attorney and my sub-specialties include charitable giving and charitable organizations. The tax benefits for charitable giving allows for the charitably inclined to give more and the not so charitably inclined to give since they are being helped along by government matching dollars in the form of a tax savings. The increase in taxes on the wealthier among us and reduction in deductions for charitable giving in particular will lead to a significant increase in tax minimization planning to help avoid paying the higher taxes and will lead, in the charitable giving arena, to an increase in non-grantor type charitable lead trusts. Non-grantor CLTs effectively allow for a full deduction of the amount passing to charity which will not be limited artificially by the new Obama loss of itemized deduction benefit rules. For every action there is a reaction.

Nothing wrong with CLT's or estate planning! But,

Why do the concepts of fairness and sharing automatically attach to a "liberal" label? Why can't they be an American common sense idea? Without a sense of "we're in this together" (which we now are more than ever), we will continue to rip at the fabric of a shared vision of the future, and stay stuck where we've been.

Sharing -vs- taking

With all due respect to the ideal that sharing should be an American common sense idea, sharing is when one person willingly gives to another. Being taxed on your earnings or accumulated wealth through income or estate taxation so that those less fortunate can have is not sharing; it is redistribution. America was founded on life, liberty and the pursuit of happness. That was the shared vision of the future from the beginning. Me deciding to willingly share my resources with those less fortunate, and I do, is within my liberty. I have the liberty to give or not, and to give discriminately. If I believe that the result of my giving is beneficial, I can continue it. If I believe, instead, that it may be enabling a problem, I can discontinue it. Someone else surely has the right to not share their resources with anyone. When those in political power, liberal or whatever label, take my resources and redistribute them to those whom they deem, with no regard to my value system or preference, that is not liberty, and that does rip the fabric woven by the forefathers of this most wonderful country. Whether members of this great country choose to "share" in that vision or not is part of the great legacy of liberty.

Sharing -vs- Taking

Rusty...you nailed it...thank you.

Awesome response!

Why are we all forgetting the basics of which this country was founded?!

Sharing vs Taking - a comment

AMEN! I couldn't have explained it better myself.

Taking -vs- investment

I do not believe that this issue can be framed as "sharing" vs "taking." Taxes may in cases function to redistribute money as one effect of a particular tax policy. More basically, however, they represent our common investment in the necessary infrastructure--physical (roads), financial (the treasury), security (military), and social (social security, medicare)--that provides the context for our collective success as a nation. Not all of us benefit equally from this infrastructure, and not all of us contribute equally. Some feel that lower and middle classes benefit disproportionately, while others feel that upper classes benefit disproportionately. All of that is fair debate, to be sure. But while it may be many things, I find it hard to call it "taking." Richard M. Chute Associate Director, Trusts & Estates POMONA COLLEGE 550 N. College Avenue Claremont, CA 91711 Tel: 909/621-8143 Fax: 909/621-8654 Toll Free: 800/761-9899 www.pomona.planyourlegacy.org www.pomona.edu

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