I must admit that at first glance this proposal was a bit concerning due to the fact that I have worked with several non-profit organizations that do good work in our community. These non-profits rely on a patron’s contribution and at this point in time many of those non-profits are feeling the bitter sting of this recession, as are for-profit businesses.
With revenue down for many businesses one might think that this proposal might put a kink in charitable giving for non-profits, but The White House has denied that President Obama’s proposal cap on charitable donations for wealthy people will harm non-profit groups during this recession due to the fact that this plan wouldn't take effect until 2011. Peter Orszag, director of the Office of Management and Budget recently stated by that time, “we expect the economy to be recovering.” Orszag also said that the plan would bring more fairness to the tax code and was unlikely to discourage giving.
Here's the facts: President’s Obama’s proposal would limit households making more than $250,000 to a 28 percent tax break for itemized deductions on their federal return. That means they could save up to 28 cents in taxes for every dollar donated — compared with up to 35 cents now. For Utahns this means that for the majority of us this proposal would not effect our tax breaks for charitable contributions, and in fact, brings us closer to the deduction percentages allowed during President Ronald Reagan administration.
The White House has also stated that, “The evidence suggests that many factors affect charitable contributions, including the desire to help the charity and overall economic conditions...”, and that “the money would be used to help pay for a plan to make the country’s health care system more affordable and accessible.” Mr. Orszag also stated that bringing down health costs “is the single most important thing we can do to get our country back on a sustainable long-term fiscal path.”
So on one hand, wealthy households will get less of a tax break for charitable giving, but for the majority of us who make charitable donations our tax refund will not be effected negatively. And, I absolutely agree that all Americans need more affordable and accessible health care. On the other there are those who understand that many non-profits would not be able to exist without their wealthy donors. The Utah Democratic Party understands this since many of our contributions come from wealthy donors, but what you may not know is that contributions to a political party are not tax deductible for individuals who do give, and over the last four years the Utah Democratic Party has seen increased giving from individuals regardless of their economic standing, or tax breaks which brings me to my last point.
When I make the choice to give a contribution the last thing I think about is what is the tax break that I will receive. I’m not saying that this is how you should think, but I hope that we can all see how important it is to support our President’s proposal, and remember that the love of Christ is charity, not the percentage of tax returns we receive when we help great organizations do their good works.
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