Does Obama’s Tax Plan Help Those Who Help Those in Need?

Ryan Messmore / March 29, 2011

A budget plan sensitive to the needs of the poor would encourage charitable giving, right? At the very least, in an economy where more people struggle to pay for medical procedures and their kids’ education, a responsible budget shouldn’t discourage giving to hospitals or universities, right?

Unfortunately, this isn’t the case for President Obama’s proposed 2012 federal budget.

Obama’s plan, which the Senate Finance Committee will discuss at a hearing this Wednesday, would likely dampen charitable giving in the years ahead. The plan would not only weaken one of the incentives for those most able to donate large gifts but would further shift perceived responsibility for social welfare from individual donors to the state.

Specifically, Obama calls for raising the tax rate for families making more than $250,000 per year from 35 percent to 39.6 percent, beginning January 1, 2013. Obama also proposes reducing the rate at which these taxpayers can take itemized deductions from the current rate of 35 percent down to 28 percent, beginning January 1, 2012. (more…)