How much do taxes affect giving? That was one of the questions President Obama was asked last night in his press conference and it's one of the questions posed in the Wall Street Journal. Interestingly, the same question is being asked about two different populations.
President Obama is proposing, as I understand it, to lower the tax credit that "wealthier" folks can get from making a charitable contribution. His rationale is that the credit for the wealthier is unfair to the middle income person and more importantly, charitable giving is not about taxes. I certainly agree on his latter point and would imagine that Mr. Obama has figured out the inequity so I would want to agree that inequities should be diminished. What's confusing is that some of the very folks that say a change is bad also agree that taxes are not one of the motivators for charitable giving. And to that point, I agree -- people give charitably because they have some passion about the issue -- taxes are just a bonus -- but, if the deduction was taken away altogether, I'd bet some folks might find other ways to invest their money.
Meanwhile, from the Wall Street Journal we learn there's a proposal to change the tax requirements for Foundations so that they give more. How ironic is it that foundations, institutions who's first middle and last names are about charitable giving, should need an incentive to give more. Something's wrong with this system.
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