Putting a cap on charitable giving for wealthy

Friday, February 27, 2009

The Obama administration's budget plan asks Congress to raise taxes on the wealthy to help stem the flood of red ink. One of the strategies to increase tax revenue is a cap on the rate that high-income taxpayers can use to claim charitable deductions. This is part of a plan to finance changes to the country’s health-care system. That news is sending shudders through the nonprofit and philanthropic world. Joining us this morning is Peter Panepento, a web editor with the Chronicle of Philanthropy, and Matthew Bishop from The Economist and author of Philanthrocapitalism: How the Rich Can Save the World joins us from Barcelona.

"I don't think you can characterize it either as a pro-rich or anti-rich budget, it's kind of a new approach and if it could come off it could be quite interesting."
— Matthew Bishop of The Economist on the new budget


Matthew Bishop and Peter Panepento

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Jerome Vaughn

Comments [1]


This charitable deduction has turned into just another tax fraud for the wealthy. And it's not just "charitable" giving, it's also religious giving.

The charitable deduction should be capped at $500 per person.

Here's why: rich people avoid paying taxes on millions of dollars of their earnings every year (up to half their gross income -- but they do more and carry the deduction over into future years). They simply deposit the money into an account in their own name, but called the "charity" account, and pay no taxes. As long as they pay out some percentage -- I believe 5%/year -- it remains tax free.

The money that should have been paid to our treasury is instead solely under the control of the rich person who may choose to spend it on a religious school for their own children. That's not right.

It's a con. If they want to be generous, do so. But not by stealing money from our nation's coffers.

Mar. 06 2009 12:59 PM

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