In Monday’s (9/19) Washington Post, Paul Farhi writes, “President Obama’s plan to fund his $447 billion jobs stimulus bill by limiting tax breaks for wealthier people is getting a wary reception from arts organizations, which fear that the proposal could cut into already diminishing donations to museums, symphonies, ballets and other groups. The president’s proposal would raise a projected $400 billion over 10 years by reducing the amount families with gross incomes of more than $250,000 a year (and individuals earning $200,000 and up) can deduct on their tax returns. It would limit those individuals to writing off 28 percent of their itemized deductions, down from 35 percent. Such deductions include mortgage interest and charitable donations. It’s this last part that makes nonprofit groups in general, and arts organizations in particular, nervous. Obama’s plan means that wealthier donors would save $2,800 in taxes on a $10,000 charitable contribution, instead of the $3,500 allowed under current law. The proposed change would go into effect in 2013. … It’s not clear how much money arts groups would lose in donations in such a tax-code change. In fact, some suggest that donors will continue to give money regardless of the tax implications. … But Harvard economist Martin Feldstein estimated in 2009 that an identical proposal would reduce overall charitable giving by about 10 percent as people reconsidered the tax implications of their donations. Other donors might stretch out their contributions or delay them.”
Posted September 22, 2011
