Obama\u27s budget offers smart shift

Abstract

Beginning in 2011, President Barack Obama\u27s proposed budget plan would reduce the value of charitable tax deductions for wealthy Americans (families with more than $250,000 in income, 1.2 percent of households) to 28 cents on the dollar. At the same time, the president\u27s budget also would increase taxes for this group (from 33 percent and 35 percent to 36 percent and 39.6 percent of their income) to help pay for reshaping the nation\u27s health care system. The tax deduction changes would not affect foundations or Americans making less than$250,000 a year. Some in the philanthropic community argue that this change would decrease the charitable giving of wealthy donors. However, the data are unclear as to whether the changes really would have a net negative effect