Obama To Seek Cap on Charity Deductions – Again

Here we go again.  Just when charities thought they dodged a bullet during the fiscal cliff negotiations in late 2012, it looks like the administration still harbors the desire to limit the deductibility of charitable donations by higher income donors.  Comments made by Jack Lew, Obama’s nominee for Treasury Secretary, makes it clear that this conversation is far from over.

This dance has become all too predictable with this President.  In his quest to hike taxes on the “wealthy”, he underestimates (at best) or willfully ignores (at worst) the impact on the broader picture, whether that’s job creation, economic growth or, in this case, charitable giving.  The Philanthropy Roundtable has estimated that Obama’s plan to cap the deductibility limit from the current 39.6% to 28% would cost charities upwards of $5.6 billion in just the first year.  That’s billion…with a “b”!

And lest you think I’m one-sided on this, the Republicans have been floating similarly idiotic proposals.  Solving Washington’s fiscal irresponsibility should start on the spending side of the ledger, not with a broadside on charities that serve such a vital role in our society.

To read more of this story, see the article in the Chronicle of Philanthropy.