As the Obama Administration and Congress have unveiled their plan for turning around the economy, grave concerns have been raised over the impact on charitable giving. Of particular concern is the proposal to limit the tax deductibility of charitable contributions among high net-worth households.
As reported in the Chronicle of Philanthropy, the Center on Philanthropy has released the findings of a study that shows the Obama tax policies related to charitable giving could impact the generosity of nearly 50% of wealthy households ( to read the Chronicle on Philanthropy article, click here ). Some 47% say they would reduce their charitable giving if their tax benefit for giving is reduced.
In brief, the focus of the Obama proposal is on individuals who make $200,000 or more and couples who earn $250,000 or more. The proposal is to limit the percentage of what can be deducted to 28% of the contribution compared to the current 35% of what is contributed.
For further perspective, see this article at foxnews.com.
Dunham+Company has consulted with tax experts to gain their insight into the impact of these policies and their potential affect on giving. The experts believe this plan will face an enormous fight in Congress and has only a moderate likelihood of ultimately passing.
It seems this fight may be already taking place as the White House is now showing signs it may reconsider this decision in light of public outcry. According to an article posted by the Wall Street Journal on March 5, the strong resistance from Democratic lawmakers has Treasury Secretary Timothy Geithner suggesting that the administration may reconsider this decision.
With mounting congressional pressure, including that from the Democratic majority, there is an increasing likelihood this measure to limit the deductibility of charitable contributions will not move forward.