Monday, February 13, 2012
As part of his 2013 budget proposal, President Obama has proposed for the fifth time to limit the percentage of income that wealthy donors can write off for gifts to charity or for housing and medical costs. Couples with $250,000 or more and individuals with incomes of $200,000 or more would be limited to an itemized deduction of 28 percent. These limits on itemized deductions are projected to reduce the deficit by $584 billion over ten years. The other four times Obama has tried this proposal, charities strongly opposed it.
Another provision in the budget proposal that would affect wealthy donors is known as the "Buffet Rule." The Buffet rule would replace the alternative minimum tax and would require that every household with more thatn $1 million would have to pay at least 30 percent of their income in taxes.
Critics fear that both of these provisions would decrease the millionaires and billionaires who give to charity, but Obama says he would structure the code provision to avoid that result.
See Lisa Chiu, Obama Budget Plan Included New Call to Limit Charitable Deduction, Philanthropy.com, Feb. 13, 2012.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.