Proposed Tax Changes Will Not Be Good for the FLWBC

pharding · Post by **pharding** » Wed Mar 25, 2009 8:17 am

One of the proposed tax changes by the Obama Administration will not be good for the FLWBC and other charitable organizations. It is my understanding that it proposes that itemized deductions for people making over $250,000 will be limited to 28% of the gross income. This is down from the current 50%.

DRN · Post by **DRN** » Wed Mar 25, 2009 10:19 am

I thought the change was from 39% to 28%.
Did giving to FLWBC increase when the deduction was increased 10 yrs or so ago for this tax bracket? Does the amount of the deduction influence people's giving to a significant extent?
Under the current system, is it fair for the deduction for those in a lower tax bracket to be lower for the same amount of dollars or even percentage of income given?

Oak Park Jogger · Post by **Oak Park Jogger** » Wed Mar 25, 2009 10:23 am

In the press conference last night President Obama suggests that your guess is inaccurate.

While the rate would drop from 36 or 39.5% to 28%, the lower rate is the same as it was back in the Reagan administration, and is in fact the same rate that is allowed for the all the people (that'd be 95-99% of American tax payers) who make less than $250,000 per annum.

Wealthy people would give to charities even if they were getting a slightly smaller tax savings, he said. "If it's really a charitable contribution, I'm assuming [the tax savings] shouldn't be the determining factor of whether you're giving to the homeless shelter [or to support The Conservancy!!] down the street." The change in the deduction rate, he added, "is not going to cripple" wealthy taxpayers. As for charities, what would help them the most is a stronger economy -- which he said his budget proposal would help produce.

People will support this organization because they care about Frank Lloyd Wright and his work and not because they have calculated the amount they want to give to get a tax deduction.

jim · Post by **jim** » Wed Mar 25, 2009 1:26 pm

And yet another reason this tax change will not hurt charities - how many people in the country actually donate 28% of their gross income - 28% of $250,000 = $70,000. Not many you can be sure.

Reidy · Post by **Reidy** » Wed Mar 25, 2009 2:54 pm

Rationalize as you will, if an activity becomes more expensive, holding other factors equal, people will do less of it.

pharding · Post by **pharding** » Wed Mar 25, 2009 3:02 pm

jim wrote:And yet another reason this tax change will not hurt charities - how many people in the country actually donate 28% of their gross income - 28% of $250,000 = $70,000. Not many you can be sure.

The key words in the original post are "itemized deductions", not just charitable contributions.

Palli Davis Holubar · Post by **Palli Davis Holubar** » Wed Mar 25, 2009 6:51 pm

From my family's gross income perspective, (considerably less than 1/5th of that $250.000 income marker) I wish people would not even call it giving. A charitable gift should not be associated with a tax benefit... impractical as that may seem to be for the non-profits where I have spent most of my working life.
We have created a selfish financial culture.
The donation rate inequality coupled with the gruby process of wringing every possible itemized deduction (too often simply the costs of life style choices) have always disadvantaged the majority of Americans and fueled the fire of resentment against federal taxes.

JSL · Post by **JSL** » Wed Mar 25, 2009 7:52 pm

For years the liberals have been complaining that the rich did not pay enough taxes...remember the "tax cut for the rich?"

Now that taxes are going up for the "rich" they are complaining again.

Are liberals never really happy?

Craig · Post by **Craig** » Thu Mar 26, 2009 6:03 am

Have adults completely forgotten how to be civil in a public forum?

peterm · Post by **peterm** » Thu Mar 26, 2009 12:01 pm

Couldn't help but think of Mr. Jones:

"You have many contacts
Among the lumberjacks
To get you facts
When someone attacks your imagination
But nobody has any respect
Anyway they already expect you
To just give a check
To tax-deductible charity organizations

You've been with the professors
And they've all liked your looks
With great lawyers you have
Discussed lepers and crooks
You've been through all of
F. Scott Fitzgerald's books
You're very well read
It's well known

Because something is happening here
But you don't know what it is
Do you, Mister Jones?"

from The Ballad of the Thin Man

Bob Dylan

And of course, the stinging last verse:

"Well, you walk into the room
Like a camel and then you frown
You put your eyes in your pocket
And your nose on the ground
There ought to be a law
Against you comin' around
You should be made
To wear earphones

Because something is happening here
But you don't know what it is
Do you, Mister Jones?"