The White House is expecting to collect an additional $291 billion over the next decade by reducing the write-off for families earning over $250,000 despite the fact Congress roundly rejected such a measure last year. While the administration is portraying this as a populist move, experts have said the end result will be a significant blow to charities and non-profits already reeling in the midst of the recession.Rich people from all political persuasions give a lot of money to charities. Part of that is their own desire to do good things, and part of it is due to a desire to reduce their tax burden. Take away the tax benefit and there will be a significant reduction in charitable giving. Starve the charities and where will people have to go to get help? The government, and that's the main intention of this legislation.
“It’s frankly surprising to see this proposal come back this year, it was very controversial last year,” said Tom Riley, vice president for communications at the Philanthropy Roundtable. “This of all times isn’t the time to take actions that would discourage charitable giving. The need for non-profits hasn’t been higher for a generation.”
Roberton Williams, a senior fellow at the Tax Policy Center said the rule change would make it about 10 percent more expensive for individuals affected to donate to charity. He estimated that would correspond to a $10 billion drop in donations out of the $300 billion Americans give annually.
And it's not just the rich that will get hit with higher taxes. The middle class will be hit with a bunch of "backdoor" taxes that will hike everyone else's bills.
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