A coalition of charities has expressed concerns about a Senate budget proposal that could potentially place a limit on charitable deductions.
John Ashmen
The group, known as the Charitable Giving Coalition, includes United Way Worldwide, the Salvation Army, Catholic Charities USA, the American Institute for Cancer Research and other organizations. Representatives of several of the groups testified at a congressional hearing last month urging lawmakers not to cap charitable deductions for wealthy taxpayers (see Congress Considers Cap on Charitable Deductions). They are now concerned about a budget proposal approved Thursday by Democrats on the Senate Budget Committee that would raise $975 billion in revenue over 10 years by reducing unspecified tax breaks for the wealthiest taxpayers and largest corporations.
The coalition of charitable groups argued Thursday, however, that any limits to the charitable tax deduction would have profound consequences for communities served by the philanthropic sector nationwide. It noted that while the Senate plan proposes limits or caps on the value of itemized tax deductions, which includes the charitable tax deduction, the Pease provision approved as part of the “fiscal cliff” agreement already limits deductions for certain taxpayers.
“The Coalition is alarmed that the Senate’s proposed budget plan does not protect the unique value of charitable deduction, especially now as communities continue to struggle to overcome a bruising recession,” said Association of Gospel Rescue Missions president John Ashmen in a statement. “We simply can’t afford to chip away at incentives that encourage charitable giving. Doing so will have profound consequences for our communities and vital efforts that heal, educate, innovate and more. “Let’s be clear. The millions of disadvantaged people who need the most support—not donors— will be hit hardest by limits or caps to the charitable deduction. We would put at risk billions of dollars in private donations and just transfer to the government funds that would otherwise go to charity. Elected leaders certainly have to make tough decisions to address our fiscal challenges, but limiting the charitable deduction is no solution. We are determined to make sure lawmakers clearly understand that this century-old tax incentive is unique. It encourages giving, provides no financial benefit to the donor and helps meet critical community needs. The nation's budget crisis is undeniable, but that is exactly why we should be creating more ways to encourage giving—not less.”
5 Comments
Very will said jrbillcpa!
I trust the charities more than the government to dole out for the needs of the poor...
The charity knows the people who need...
The government is just buying a vote. And when you look at the way they waste on all these programs (like the 10 million handed out in free phones to people who don't qualify for free phones) it's pretty apparent, they need to get out of the business of taking and giving.
Posted by: PAT | March 18, 2013 12:31 PM
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Everyone knows (or at least should know) that taxes must go up and large spending cuts are needed if we are ever to begin to balance our budget and pay down our 16.5 trillion in debt. Problem is, no one is willing to share in the pain that will surely result from the massive cuts that are needed.
Posted by: jroster | March 18, 2013 9:21 AM
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They are saying that "people will do what they were gonna do anyway" , but the sad fact is that people can donate no MORE than they can "do without"...up to and including 100% of what they have.
Suppose, for a moment, that you're one of those who earns enough to be taxed at the 35% tax rate. If what you have left after everything else is paid for (including the taxes on everything else you earned and spent elsewehere) is $100,000 of your money, then the donation (for those taxed at a 35% rate) can be $100,000/.65 or $153,846.15 and you'll be out $100,000 and have nothing left...because you'll get back the extra $53,846.15 from the IRS. With no benefit of any deduction at all, you'd pay $35,000 in tax on the $100,000 (at a 35% rate) and what would be "left" to give away is $65,000, and you'd still have nothing left.
Scenario #1 costs you $100,000 and costs "the government" $53,846.15 (which goes to the charity). Scenario #2 costs you the same $100,000 but benefits the government by $35,000 (which is taken away from the charity). The net difference is $88,846.15 less to the charity and more to the government.
Sure, there are plenty of charities that "don't deserve it", but they will ALL be tarred with the same brush...unless you're one of those who believes that "good things can/must only come from the government", then you should oppose any effort to limit /cap/ eliminate itemized deductions as long as charitable deductions fall into that category.
Posted by: jrbiiicpa | March 18, 2013 8:56 AM
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Relatively flexible tax policy will be tough and uncompromising.
Posted by: nadezdamindyuk | March 18, 2013 8:03 AM
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Be it good, bad, self-centered, world wide, etc. etc. every one has an agenda...
Posted by: taxking | March 15, 2013 10:55 AM
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