The Obama "jobs" bill… creates a new battle between the world of private (voluntary) philanthropy and public/government (involuntary) philanthropy.
Surprise! There's a lot of commotion surrounding President Obama's jobs bill, and for good reason, but not all of it is positive. Small businesses, for one, are lukewarm since their concern is less for tax-breaks and more for actual revenues. However, the biggest threat under the bill may be to private charities and the donors who voluntarily support them. How? The bill proposes eliminating some of the deductions for charitable giving among high earners.
The jobs bill comes out to a $447 billion price tag, and much of it would be "paid for" by limiting the tax deductions for charitable giving amongst top earners making $200,000 or more annually. Currently, these earners can deduct 35 cents on the dollar, but if the bill passes as written that rate would drop to 28 cents. The net effect? This move likely will effectively limit total donations to charity by redirecting those funds to government coffers* in the form of higher taxes. Indeed, the amount of money in question, 7 cents for every dollar, adds up to the staggering amount of $467 billion over 10 years, according to White House estimates. If you give to charities of your own selection, then this will be an important development to follow for the sake of your charities of choice and to anticipate your upcoming tax liabilities.
* Sidebar: We all know how efficient and effective the government (especially at the federal level) is at feeding, clothing and housing, let alone education the poor.
Reference: The Wall Street Journal (Spetember 13, 2011) "Why Obama's Jobs Bill Could Be Bad For Charity"