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Obama Takes Aim at Charitable Giving

Discussion in 'Political Zone' started by Danny White, Mar 25, 2009.

  1. Danny White

    Danny White Winter is Coming

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    I really hope he doesn't succeed in doing this. It would definitely be a blow to charitable giving.

    That he defends it as "the right thing to do" really makes me question his priorities.

  2. ABQCOWBOY

    ABQCOWBOY Moderator Staff Member

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    The Question that is not asked is, of that supposed 1%, how much of the total donations come from them? I mean, if you have 1% donating 1% of all donations in this country, then OK, I can see that. However, if you have 1% donating 60%, then you have a problem because that 60% will go away and then your left with a reduction that will have to be made up some how. One guess how that will happen. Essentially, another hidden tax on the 95% of Americans who's taxes are not supposed to go up.

    It's unreal.
  3. Yeagermeister

    Yeagermeister Active Member

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    How soon will the charities get a bail out?
  4. Danny White

    Danny White Winter is Coming

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    Good point ABQ.

    I'm a fundraiser, and I can tell you with certainty that this will absolutely reduce charitable donations... so if that's Obama's goal here, then mission accomplished. :rolleyes:

    You're absolutely right about that 1% being a huge portion of total giving. The one thing you're wrong about, though, is that if their gifts go away, it will not be "made up somehow" -- what will happen is that charities will just get a lot less money, they'll be less effective, and the country will suffer as a result. Ironically, those who will suffer most are those who most need charitable help, i.e. the poor and needy.
  5. ABQCOWBOY

    ABQCOWBOY Moderator Staff Member

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    You may be right Danny, I don't know. However, I would expect that if the President takes a whiz in the cup of charity, so to speak, it would fall upon him to make it right. I would think that since he's handing out money to all comers, he would at least hand a little out your way. I don't know. I could be wrong there.
  6. Cajuncowboy

    Cajuncowboy Preacher From The Black Lagoon

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    Great! Yet another step on the way to making EVERYBODY dependent on the government.

    I hope this guy is gone AND soon!
  7. ninja

    ninja Numbnuts

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    Those who relied on charities before will just rely on the government now.

    Are these rich people giving just to get a tax break or because they want to help? Absent the tax break, what type of person would then forego donating to a previously thought noble cause? Maybe they will give less.

    Just go to a flat tax!!! It solves everything.
  8. Doomsday101

    Doomsday101 Well-Known Member

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    I don't think the charitable organization care the reason why if someone is donating 1 mill or some other large amount. I'm not naive to think writes off do not play a big part in the reason but at the end of the day this needed donations get to the people who need it. As for relying on Government when has Government ever did anything that did not cost twice as much or ran efficiently? Most government ran agency are wasteful than any private business out there
  9. tyke1doe

    tyke1doe Well-Known Member

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    I don't think people give to charity simply to get more back on their taxes or less their tax burden. That's sort of ridiculous when you stop to think that you don't nearly get back as much or save as much as you give.

    The tax break is nice, but I would give even if I received no tax break.

    Besides, the thread title is misleading. Obama is taking aim at charitable giving. Obama is taking aim at the charitable giving of the top wage earners.
  10. Cajuncowboy

    Cajuncowboy Preacher From The Black Lagoon

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    Right. He is singling out a group of private citizens and creating more punitive taxation. The bottom line is that it will cost these people who give the largest amounts, more to do so. And just like we are finding out, when the big guys get hit, it all comes rolling right down the hill.
  11. DFWJC

    DFWJC Well-Known Member Zone Supporter

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    This is a horrid idea. Grotesque really. What the hell is the idiot thinking? The consequrnces will be far-reaching and millions around the world that are in need will be punished by government greed.
  12. Jarv

    Jarv Loud pipes saves lives. Zone Supporter

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    You mean like the type of people that build new wings on hospitals and schools and have them named in their name ? People like philanthropist ? Those are terrible people and should be taxed more.

    As stated earlier in this thread, OBuya is trying to rid us of these people so he can tax us more and give the money out himself.

    One other thing, off the topic. Everyone on welfare or un-employment should be the ones working on highways and bridges. that way people getting paid for doing nothing are doing something.
  13. Danny White

    Danny White Winter is Coming

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    You've got it right... most people won't stop giving entirely (although some may) but they certainly will give less.

    Of course most people don't give solely for the tax break... but at the higher levels, the tax implications most certainly do play a factor. People will give less because the cost of their gift will have increased due to this new policy.

    The result is an indirect tax on charities, hence the accuracy of the thread title.

    Consider this:

    A couple that is in the 35 percent bracket gives $100,000 to charity. Under current law, (presuming they can deduct the entire $100,000 in the year of transfer under the charitable percentage limitation rules) they will reduce their income taxes by $35,000. The net cost of their gift will be $65,000.

    Under the Obama plan, the couple will only be able to deduct their gift at the 28 percent rate, thereby reducing their taxes by $28,000. In essence, they will pay an additional $7,000 in tax for the privilege of making their gift thereby increasing the after-tax cost of their gift to $72,000—a 10.8 percent increase over current law.

    And when the Bush tax cuts expire after 2010, it will cost donors in the top bracket of 39.5 percent an additional $11,500 to make a $100,000 gift. This represents a 19 percent tax on giving – not to mention possible implications on state income tax.

    (http://www.pgdc.com/pgdc/obama-tax-plan-would-increase-cost-charitable-giving-wealthy-donors?page=1)
  14. TheCount

    TheCount Pixel Pusher

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    Certainly sounds like it'll reduce how much the rich give, not neccesarily how much the rest of us give.

    I'm curious to know how it got to the point where if the middle gives as much as the rich though, they get less of a tax break.

    I suppose he could have done the opposite and raised the percentage for the middle, would that change how people viewed it?

    Obviously that wouldn't help fund his budget though.
  15. DFWJC

    DFWJC Well-Known Member Zone Supporter

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    This explains it well, imo. It's not that people decide to give because they get a tax deduction, but certainly the amount that is funneled to chrarities will be reduced.

    I know that I budget heavily toward charitable giving and I directly factor in the tax implications. If I plan to give 15% of my income to charity, I actually add onto that amount the additonal 30 or so percent that I get from deductions.
    This WILL reduce my charitable giving and it sucks.

    In essence, Obama is taking a portion of the charity money I would have given to some group in need and instead collect it in taxes to spend as the goverment pleases. It's sick.

    I'm an Independent, but I'm rapidly growing to hate this man's policies. And hate is a word I do not like to use.
  16. Danny White

    Danny White Winter is Coming

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    In doing some research on the subject, households with over $1 million in wealth (the very households Obama is targeting here) are responsible for about half of all charitable donations.

    http://www.american.com/archive/2008/march-april-magazine-contents/a-nation-of-givers
  17. Danny White

    Danny White Winter is Coming

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    It's actually pretty straightforward. It got to this point because the rich pay taxes at a higher rate, so any deduction they get is at that higher rate as well. If the rich paid the same percentage as the middle or lower income groups, then they wouldn't get a higher percentage deduction.


    In essence what Obama is trying to do here is say: "You pay taxes at the 35% rate, but for your deductions we're going to pretend you only pay them at the 28% rate."

    And from what I'm reading, 28% is only the start... eventually the goal is to phase out the deduction entirely for the top bracket, which would raise the cost of giving for them even higher.
  18. DFWJC

    DFWJC Well-Known Member Zone Supporter

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    No doubt. he has not friggin clue what he is doing here. Americans are very generous and regardless of what some class warfare people may think, many Amercian high income earners feel it's an honor to give back.....but in a way that they, not the government chooses.

    One reason American high earners give more than some from other nations is most likely they took risks here and actually earned the money. Socialistic policies inhibit risk taking because there is less reward. No risk, not big breakthoroughs at eany level.
  19. TheCount

    TheCount Pixel Pusher

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    Good link, thanks.

    Q. Do Americans mostly give because our tax system rewards it?
    A.The U.S. federal government and state governments make monetary gifts to public charities tax deductible. So if a taxpayer gives $1,000 and pays a tax rate of 35 percent on her last dollar of income, her donation saves her $350 in taxes.

    The amount of taxes not paid because of donations is huge: it represents the single largest government “matching grant” program ever. The Internal Revenue Service estimates that in 2002, individuals donated and deducted $142.4 billion in monetary and in-kind gifts. Breaking this figure down by income class and applying 2002 marginal tax rates for these classes, we can estimate that this represents foregone income tax revenues—and hence a government subsidy to nonprofit organizations—of about $37.2 billion.

    Still, tax deductibility is actually irrelevant for most people. IRS records show that only about a third of people who file tax returns itemize their deductions—which means that most Americans (particularly middle- and lower-income citizens) don’t even claim the deductions to which they are entitled. Even among households earning over $120,000 per year, only about 40 percent itemize their deductions. Furthermore, research shows that virtually no one is motivated meaningfully to give only because of our tax system.

    ------------

    Sounds like in addition to getting less of a write off than the rich, most of the middle and lower have not even been sticking their hand back out to the government for their just reward.
  20. Danny White

    Danny White Winter is Coming

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    Americans, by far, give more per capita than those from any other nation.

    From that same site I listed before:

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