Obama budget cuts some tax breaks for non-profit giving

From Howard Friedman at “Religion Clause

President Obama yesterday released his budget proposals in a 140-page document titled A New Era of Responsibility: Renewing America’s Promise. One provision is controversial among non-profit groups, including a number of religious organizations. For families with incomes over $250,000, itemized tax deductions (including charitable deductions) would be at only a 28% tax rate instead of 35%. The additional revenues generated would help expand health insurance coverage. Today’s New York Times says that “wealthy donors and the nonprofit groups they support were in an uproar” over the proposal. However it goes on to report that surveys indicate few wealthy donors are likely to reduce their giving as a result of the change and many high-income donors are already capped at 28% because of the alternative minimum tax. A statement opposing Obama’s plan issued by United Jewish Communities however argues that “any reduction in the tax benefits available for charitable giving will have a significant negative impact on giving.”

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