President Obama’s budget calls for a decrease in the amount of tax savings that wealthy donors (those who earn more than $250,000 per year) can claim after giving to charity. The budget estimates the new rule would bring in about $318 billion over ten years. This means that those in the 33% or 35% tax brackets would only get to claim 28% of the donation as a tax brake.
But charities and their supporters in Congress don’t much like the idea. “After objections from Democratic lawmakers, Treasury Secretary Timothy Geithner appeared to suggest at one point Wednesday that the administration was willing to consider dropping or modifying the proposal,” reports The Wall Street Journal.
Charity Navigator says it sees a huge jump in donations in the days before January 1, as donors adjust their giving for tax purposes. The Indiana University Center on Philanthropyestimates the new rules would decrease giving by nearly $4 billion, at 2006 giving levels.
Churches and other religious groups, whose services aid the increasing numbers of needy and who are already doing more with less, are likely to increase their pressure on the White House as the budget debate draws on.
