"President Obama Stands By Proposed Charitable-Deduction Limits"
From the Art Law Blog…
The Chronicle of Philanthropy has the story. And from the NYT’s Live Blog of tonight’s news conference:
"Mike Allen of the Politico asked Mr. Obama whether he was reconsidering his plans. No, the president said. … ‘I’ll tell you what has a significant impact on charitable giving, is a financial crisis and an economy that’s contracting,’ he said. ‘And so the most important thing that I can do for charitable giving is to fix the economy, to get banks lending again, to get businesses opening their doors again, to get people back to work again. Then I think charities will do just fine.’"
UPDATE: Harvard economist Martin Feldstein, who’s a member of the President’s Economic Recovery Advisory Board, disagrees:
"President Obama’s proposal to limit the tax deductibility of charitable contributions would effectively transfer more than $7 billion a year from the nation’s charitable institutions to the federal government. But the high-income taxpayers affected by the rule change are likely to cut their charitable giving by as much as the increase in their tax bills, which would, ironically, leave their remaining income and personal consumption unchanged. In effect, the change would be a tax on the charities, reducing their receipts by a dollar for every dollar of extra revenue the government collects. It is hard to imagine a rationale for taxing schools, hospitals, medical research budgets and arts organizations in this way."
UPDATE 2: Tom Maguire’s with Feldstein: “During his press conference Obama explained, apparently with a straight face, that making it more expensive for people to donate to charity by reducing the value of the charitable tax deduction will not affect the level of charitable donations.”
UPDATE 3: From Thursday’s Washington Post: “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.” Diana Aviv, president of Independent Sector, a national coalition of charities, is quoted as saying any decrease in charitable giving caused by the proposal would be “seen as a stake in the heart. With all other means of income down, the idea that there will be another potential cut to the income of those nonprofit organizations feels catastrophic. It is utterly unacceptable.” A former tax counsel to the Senate Finance Committee says: “Of course it’s going to affect behavior. The charities recognize that. Everyone does… . People just don’t have their feet on their ground if they’re not recognizing that reality.”
you scream, i scream, we all scream for ICE CREAM...from an accounting text...
"One day working in a confectionary store to supplement his teaching income, Christian K. Nelson became puzzled by a little boy’s indecision between a chocolate candy bar and a scoop of ice cream. When questioned, the freckle-faced boy replied, "I want ‘em both but I only got a nickel.
"With a clever hunch and a little ingenuity, Mr. Nelson found a way to combine the two ingredients in what would become America’s first chocolate-covered ice cream bar. The little boy got his wish and Mr. Nelson founded a corporation on the success of the Eskimo Pie product."