White House Cuts Charity Tax Deduction

Giving to others could become an even more thankless task with the Obama administration’s proposal to reduce tax deductions on charitable donations. According to the 2011 fiscal budget, the White House expects that cutting write-offs for those households earning $250,000 will allow the government to collect $291 billion over the next decade. Last year, Congress rejected the plan, which the Obama administration is presenting as a populist move. But experts say it could cause a problem for charities and non-profits, which have already suffered from the recession. “This of all times isn’t the time to take actions that would discourage charitable giving,” said one executive at the Philanthropy Roundtable. The deduction could lead to a $10 billion drop in the $300 billion Americans give annually, according to a senior official at the Tax Policy Center. The Obama administration previously defended the proposal, suggesting that the $100 million in the Recovery Act allotted for charities and non-profits and the imminent increase in charitable donations when the economy recovers would protect them sufficiently.