by Fred Stokeld
The Senate on April 2 rejected a proposal by President Obama to fund his healthcare reform initiatives by limiting the deductibility of charitable contributions of high-income taxpayers.
The Senate on April 2 rejected a proposal by President Obama to fund his healthcare reform initiatives by limiting the deductibility of charitable contributions of high-income taxpayers.
During votes on the 2010 budget resolution, the Senate adopted an amendment offered by Sen. Robert F. Bennett, R-Utah, to reject the president's proposal, which would reduce the tax rate at which taxpayers earning more than $250,000 could claim charitable deductions from 35 percent to 28 percent.
"The Senate sent a clear message to the president that we do not support increasing taxes on charitable contributions to try to cover the costs of health care reform," Bennett said. "Charities benefit greatly from the donations made by individuals in this income bracket and raising taxes on these contributions would be a disservice to Americans and the millions of charities across the country."
Obama has defended his proposal, arguing that just 1 percent of the population would be affected and that the effect on charitable giving would be minimal.
But critics contend donations to charities would drop if the Obama plan were enacted, and groups representing the interests of charitable organizations in recent weeks have urged that the deduction remain at current levels.
"At a time when charities and nonprofits are stretching to support needs in their communities, it is important that public policies support and encourage charitable giving," the Council on Foundations said in a recent statement. "We strongly support maintaining current law."
Source: Tax Analysts