Obama Tax Proposal to Stifle Charitable Giving

Discussion in 'Politics' started by carpro, Feb 27, 2009.

  1. carpro

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  2. Steven2006

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    I would like to believe that those who give because of genuine heartfelt reasons will continue to do so. I also suspect that many of the people who's main motive for giving is a tax break might not give to the most worthy of charities. Hopefully this won't hurt those truly in need.
     
  3. LeBuick

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    Said well...


    And I didn't think it was "tucked away" since Obama discussed the 28% cap when he rolled out the plan. This means their deduction would drop 5% from 33% to 28%.
     
  4. carpro

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    There is no doubt at all that it will hurt many worthwhile charities.

    More people will be dependent on the government.

    Hmmm...

    Makes one wonder if that's the real plan.
     
  5. windcatcher

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    The Wall Street Journal reports that families in the top two tax brackets would see the value of the tax break for their donations to charity limited. "Households paying taxes at the 33% and 35% rates can currently claim deductions at those rates. Under the Obama proposal, they could deduct only 28% of the value of those payments," the report says.

    The tax increase would reduce the tax break on a charitable donation of $1000 from the current $350 to $280, a 20% decrease in the benefit. That figure will increase even more in 2010, when the Bush tax cuts of 2001 and 2003 are set to expire. The Obama Administration plans to allow the top tax brackets go up to 39.6 percent, further reducing the value of the deduction for giving. Throw in the president's identical proposal to reduce the value of the mortgage interest deduction for top bracket tax filers, and the combined tax increases could cause a substantial decrease in charitable giving among the well off. Since the wealthy give more to charity proportionally than any other income group, the less fortunate could see a reduction in services as a result of cut backs at charities from the resulting decrease in donations

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    Interesting comment section follow article.

    I'm not sure that I'm understanding this: If income is in a tax bracket of 28%, and I deduct charitable givings from income....... then I've reduced my tax liability at the 28% rate..... or so I would think..... That means for every thousand I give to charity was at an out of pocket cost of only $720 effective income reduction because my uncle Sam was going to have claim to the $280 anyway. But this sounds like its a special cap on charity deductions which requires a separate computation! This is an unfair penalty on the rich for making charity their choice and not the government. Talk about the complexities of income tax!

    More trickle down economics which will hurt both poor and rich. Already, many independant charities are being tied in to standards based upon one's qualifying for government programs. Increased taxes are coming: and further enslavement and dependancies on government.
    Behold! He cometh quickly! The tax man cometh! Look out!:tonofbricks:
     
  6. Salty

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    I think that statement sums it up.

    The power to tax (and give tax breaks) is the power to CONTROL!!!

    If only EVERYONE were to pay taxes - I believe the stat is 35% of WORKING Americans DO NOT pay federal income tax.

    We need the electronic tax !!
     
  7. carpro

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    Democrats,in general, don't seem to like charitable giving. It's a matter of control.

    http://www.pgdc.com/pgdc/obama-tax-plan-would-increase-cost-charitable-giving-wealthy-donors

    “In looking at the rationale for the original charitable deduction,” said Mann, “... 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.

    SNIP

    “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.”
     
  8. Revmitchell

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    This rather suspicious attitude is not necessary. People have to live by a budget.
     
  9. just-want-peace

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    Say you are in the 25% bracket!

    It is utterly foolish to "spend" (give to charity) $100 when the best you can lessen your tax liability would be $25 -- IF taxes are your reason to give!

    What may happen is that the scenario above would then be that the charity gift would only be $75; instead of the $100 that had a tax deduction.

    From this standpoint, giving may be diminished, but I don't see that it would be extreme since most who give do so for reasons having nothing to do with taxes. Just MHO of course!:thumbs:
     
  10. NaasPreacher (C4K)

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    Should the federal government incentivise charitable giving anyway? Is that their role?
     
  11. LeBuick

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    According to the OMB, the right is again twisting the facts and not telling the whole story.

    1. The code favored the rich by giving them a greater deduction than you and I who get a 15% deduction.

    2. The increase doesn't take effect until 2011 which we hope is after the recession.

    http://www.whitehouse.gov/omb/blog/09/02/27/TheBudgetandCharitableDonations/

    So what you're not being told by all the conservative blogs is this measure serves to make the tax code more equal because it means the rich will get a 28% deduction while you and I remain at 15%.
     
  12. Revmitchell

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    That is Odrama's spin.
     
  13. LeBuick

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    There is another twist to this, the difference in this deduction (33% vs 28%) will go to the $634 billion reserve fund to fund health care reform. So when you really think about it, it is still going to a charity, just not the one of the person's choosing. I know that doesn't go over well with the right but it's not like they're using the money for food stamps or some other social waste that helps the lazy and lame.... :thumbs:
     
  14. Revmitchell

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    Just more I know what to do ith your money better than you do mentality.
     
  15. Salty

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    The "rich" may get a "bigger" deduction beacuse in raw dollars they pay a whole lot more in taxes!!
     
  16. LeBuick

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    Can you prove that the spin is wrong with facts? Or do we just go by what you heard or read on the incredibly accurate and reliably unbiased Internet?
     
  17. LeBuick

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    Not with loop holes like that they don't. Percentage wise the middle class pays a larger percentage of their income than the rich who have benefited by biased tax laws like this. I believe there should be a standard deduction for charitable giving. Either 28% or 15% but let there be one rate for everyone who gives.

    Currently the code says a rich mans dollar is worth more than the poor mans dollar. This is not what we were taught by Jesus when the woman gave her last pennies. He said the poor man's gift, when given from the heart, is at least worth every bit as much as the rich mans gift.
     
  18. LeBuick

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    You don't think some of this has to do with Republican's having more to give? A whole lot of folks who voted Democrat this past election are the recipient of these charitable gifts so you wouldn't really expect them to give or it means we are giving them too much.
     
  19. Revmitchell

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    yea right after you
     
  20. LeBuick

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    Didn't think so... :thumbsup:
     

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