|President Obama defends his proposal to cut the tax deductions that wealthy Americans can claim for their charitable donations by arguing that the shift would not have an adverse effect on giving, but two independent analyses concluded that the proposal could result in a drop of as much as $3.87 billion for the already reeling nonprofit sector. |
In his prime-time news conference Tuesday, Obama pushed back against bipartisan criticism of his plan, which is included in his budget blueprint, by saying that "there's very little evidence that this has a significant impact on charitable giving."
But a report from the Center on Budget and Policy Priorities said total charitable contributions would decline by about 1.3 percent, while the Center on Philanthropy at Indiana University calculated that overall giving would drop by 2.1 percent. The highest-income households would decrease their giving by 4.8 percent, or $3.87 billion, the latter group found.
"Charities and the public need to understand that in the current economic environment, which is creating difficulty for some nonprofits and their constituents already, this public policy change is likely to have an additional negative effect," said Patrick M. Rooney, the philanthropy center's interim executive director.
But you know the answer? Health care reform will make people happy and they will donate just as much.
| Administration officials said the proposal should be considered within the totality of the budget. The policy change would help finance efforts to reform the nation's health-care system, said Kenneth Baer, a spokesman for budget director Peter Orszag. |
"Generally what keeps people giving is economic growth, increasing incomes and increasing prosperity, and in totality that's what this budget would do," Baer said. "This change is going to fund health-care reform, and constraining those costs is the single biggest thing we can do to put our country on a sustainable fiscal path and get this country going."
This is the new hotness for raising taxes, "reform" healthcare and more money will still come your way.