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It helps to actually read the article. Here is a snippet:
President Obama has proposed limiting to 28 percent the tax break couples earning more than $250,000 (individuals $200,000) can get for each dollar of itemized deductions, including charitable donations, starting in 2011. People in the highest tax brackets can now get 33 percent or 35 percent.
The income level of the donor has always determined the tax benefit; 10% tax rate= 10% benefit, 35% tax rate = 35% benefit. What this would do is to limit the tax advantage for taxpayers at the 35% level to 28% perhaps causing a reduction in giving. IMO most charitable orgs have an excellent record of getting the most bang for the buck with typically <20% of donations being eaten up by overhead costs. Government programs trend towards >60% overhead.
In addition the dollars go to programs the donor supports rather than including programs they believe might subsidize failure, stupidity, or laziness.
Quote:
Originally Posted by Katiana
Many nonprofit leaders have criticized the proposal on the grounds that it would dampen giving, harming charities that are already under strain from the economic downturn. Others, however, support it because the tax revenue would be used to bring down health-care costs, which they say would benefit both charities and the people they serve.
Believing that the revenues would/could be directed towards health care costs indicates a general lack of knowledge of basic accounting principals and the federal budget process. It also requires that one believe that current health care plans are not going to increase overall costs for everyone.
I actually read the article- this would be an illustration of viewpoint affecting interpretation.
Why would the government want you to have money to give to a charity, that would mean they aren't taxing every last dime you have to offer. Charities only interrupt the income stream ,destined for government, like beavers.
Seems like just another 'redistribute the wealth' scheme. In addition to increasing the upper tax rates with the expiration of the Bush tax cuts, he'll then hit the wealthy with reduced deductions for charitable contributions. End result: Per Obama, more funds for healthcare. Actual result: less charitable donations.
Just because he "thinks" it's a good idea doesn't make it one.
The government isn't telling you which charities to support--they're just not going to give you a tax break far above your normal income tax rate to do it. This only impacts the top 1%--people making over $250,000.00/year.
Where does this idea come from? The deduction has always been tied to the donors tax rate, it's never been "above your normal income tax rate". What the President is proposing is to limit the tax break to 28% even if your tax rate is 35%! Far below your normal tax rate.
Quote:
Originally Posted by mb1547
It's a myth to think that the majority of charitable giving comes from the wealthy--middle class people give a much higher proportion of their income, and often higher dollars. I have mixed feelings on this--I don't think it's going to generate all that much additional revenue in tax dollars, just as I don't think it's going to make a huge difference in charitable giving.
I would agree with this. My experience with upper level income donors is that they are more likely to donate appreciated assets- which would be less impacted by this change.
The article says that it only affects those making $200,000/yr or more and then lowers the max deduction by 5-7%. so what? I don't think that it goes far enough. When you give to a so-called charitable org, there's no accountability that the $$ is going directly toward the needs and not the bank account of the charity administration, espec the rotten churches. I also question why taxpayers can get tax deductions for orgs that concentrate their aid in foreign lands and not in our own country where the need is so great.
Again a leftist viewpoint- ' only those charities that I personally approve of '. If an organization is qualified by virtue of 503c then the donation qualifies- regardless of whether we personally approve of it's goals. You might look at what it takes to qualify:
The income level of the donor has always determined the tax benefit; 10% tax rate= 10% benefit, 35% tax rate = 35% benefit. What this would do is to limit the tax advantage for taxpayers at the 35% level to 28% perhaps causing a reduction in giving. IMO most charitable orgs have an excellent record of getting the most bang for the buck with typically <20% of donations being eaten up by overhead costs. Government programs trend towards >60% overhead.
In addition the dollars go to programs the donor supports rather than including programs they believe might subsidize failure, stupidity, or laziness.
Believing that the revenues would/could be directed towards health care costs indicates a general lack of knowledge of basic accounting principals and the federal budget process. It also requires that one believe that current health care plans are not going to increase overall costs for everyone.
I actually read the article- this would be an illustration of viewpoint affecting interpretation.
Dano
Bold #1: Not in all cases. Here are a couple of websites that can help you evaluate charities.
and I totally disagree: I have a right to decide, as every American does, what charities I want to support. The government doesn't always know better, how many do they successfully get off the dole? Not many. I don't care if it is the check I write to church each week, the candidate I support, the food bank I donate hours each week to or the Animal shelter contibutions I make, it is my money. Of course this doesn't affect me, I fall way below the limit line, we almost fall into the "give me some help" catagory.
Nita
From the studies that have been done on those that fall under what used to be called the charitable choice, especially in regards to employment, it was the government/secular agency that was able to help people secure jobs that had longer hours (40 hours) and benefits. And as much as I wished that the article was going in the way of a slam dunk.......it didn't. And I was hoping that the article would have said something about dropping what is referred to as welfare funding of religous affiliated non-profits---but it didn't. I didn't see anything related to the accountablility in the form of services that were delivered. So, no government plot.
Hell, I would have even been happy if it had said, if your agency states that they serve this type of client and this type of client acts out and you have said client arrested---you lose all of your funding and your status. It didn't say that either. So, no plot.
I object to the characterization of a charitable deduction as "a tax break." A donor gives up wealth to make a charitable contribution at the rate of 100 cents on the dollar. The cost to the donor is the same as the benefit to the charity. The president proposes to tell the wealthy donor to reach into his pocket for additional money on top of the amount donated in order to make a contribution.
This is just another one of the many tricks and traps that make the maximum effective tax bracket far higher than the advertised rate, adding more complexity to an already ridiculous tax code.
Actually, I think you are playing with two or three different directions here.
It isn't a plot that says the government does it better.
Truth be known, the government actually does it better because the government can't pick and choose. And I wish that is what the article was going for, but it doesn't. In fact, the article doesn't include the religious-affiliated charities that receive my tax dollars and are lacking in the accountability department. Nor, am I reading this as a buying votes with tax dollars.
The gov't will also waste a lot more money than a private organization would.
Honestly...it's not surprising, considering that as a millionaire he gave less than $200/year to his church for 20 years. I just think he believes gov't is the answer to all of man's problems.
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