Bill Amendments Proposed to Fund Healthcare Reform
Through Reductions to Charitable Deductions
The Senate Finance Committee is working on a bill to fund healthcare reform which includes proposed amendments that would cap the value of charitable deductions. Of utmost significance in these proposed amendments is the proposal to decrease the charitable deduction for donors earning more than $200,000 (and families earning more than $250,000). These donors can currently deduct charitable gifts at their highest tax bracket (33 percent or 35 percent but going up next year), but the proposals would limit the deduction limited to offsets only against lower tax brackets, effectively decreasing the deduction for taxpayers in those brackets.
The Association of Fundraising Professionals states the cap on deductions would have an enormous impact on charitable receipts. It cites a 2008 Bank of America Study on High Net-Worth Philanthropy, which found that high net-worth households (household income greater than $200,000 and/or net worth of at least $1 million) account for between 65 and 70 percent of all individual giving in America. According to AFP, “while these individuals and households would probably continue to give if the value of the charitable deduction is reduced, it would likely affect the timing and size of their gifts. Even though the proposals would not take effect until 2011, our members report that donors are already delaying gifts and multi-year pledges.”
AFP and other coalitions of charitable organizations are urging the public to contact their congressional representatives and express dissatisfaction with the proposals. |
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