The Charitable Deduction: How Essential Is it?

Recently the Obama administration suggested adjustments to charitable tax deductions for those wealthiest individuals who itemize. While the proposal would result in increased tax revenue, it was also felt that it would make the code fairer to less wealthy contributors who do not get as generous a deduction. Although reportedly the proposal is considered dead-on-arrival by many on Capital Hill, the Senate will hold hearings on the matter Tuesday morning.

In order to provide some context to this debate, The Chronicle of Philanthropy provides two short videos below on the structure of the proposal as well as their concern of what the change would mean to charitable giving.

Although the changes noted in the videos could be very disruptive to many charities, those fortunate to rely on major wealthy donors, one cannot not also wonder if many of the charities those individuals are supporting are not more likely to be far from the margins of society. Many times the largest contributions of our wealthiest are to colleges, hospitals, museums, and arts organizations. It would be interesting to see a deeper analysis of this proposal against what more tax revenue might mean to social programs government is more likely to be the primary (or only) sponsor of.

No doubt such a study will emerge if debate continues on this topic.

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