President Obama's proposed 2010 federal budget contains a 7 percent cut in charitable tax deductions for the nation's wealthiest taxpayers. Some religious groups are asking how that will affect their bottom line.
The answer: it depends who you ask.
Here's what it means in real terms for the 5 percent of Americans whose household income exceeds $250,000 a year. Those families can currently save $350 in taxes for every $1,000 donated to charity; under Obama's plan, that amount would drop to $280 per $1,000 donation.
"By doing this, you raise the cost of giving" said Roberton Williams, a senior fellow at The Tax Policy Center, a liberal Washington think tank.
By Williams' calculations, the change will result in a 10 percent drop in charitable giving by wealthy Americans, who typically contribute about 20 percent of all charitable dollars. In real dollars, Williams projects a decline of about $6 billion in charitable donations because of the change.
At the same time, Williams said religious institutions may be spared because most wealthy Americans funnel their biggest donations to education, the arts and health care. Think campus buildings, art museums and hospital wards with family names attached.
"My guess is that religious groups will not see nearly the drop that other charitable recipients will see," Williams said.
That leaves religious groups at the mercy of rank-and-file members and donors who have been tightening their belts in the economic downturn. For now, experts say, religious groups are probably on fairly safe ground.
Sylvia Ronsvalle, executive vice president of the Illinois-based Empty Tomb research organization, has studied economic data over time and says religious groups often fare better than most.
"There does not ...1
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