Sorry. I wish we had a politics board right now.

I'm listening to his press conference and he's talking about changing the tax rates so that the top earners pay a greater percentage of what they earn in income taxes.

The part I am rolling my eyes about is that he says it will have no significant impact on charitable giving if he changes the amount people can write off when they give a gift.

He keeps saying, "I don't think whether they can write off 34% or 23% will make that much of a difference in whether they give $100 to that homeless shelter down the street."

Ummm... I agree with you, Mr. President, but the people you are talking about don't make $100 donations. They give $100 tips! The donations they make are in the neighborhood of hundreds of thousands and millions. The percentage they can deduct is most certainly a factor in how they choose to give. They have big-gun tax advisers who tell them how much to give and when to give it to minimize their tax consequences. Some of them give out of the kindness of their hearts, no doubt, but the fact that they will either have great tax savings plays into how *much* they give away.

Non-profits are hurting right now because donations have slowed to a trickle. The people who have the means and the desire to give away big chunks of money are going to face a disincentive that is, IMHO, so unnecessary.

Yep, I think charitable donations will plummet because of the reasons you gave. I used to think "yes, tax the rich, they've got plenty" but not giving the rich tax breaks, etc... means less charitable donations, less business start-ups, investments, etc... It does have a trickle down affect.

I really wish we had a politics board right now too. I learn so much from listening to other people's points of view that I may not have considered yet. I work for a non profit and we've already seen how bad things are right now...I can't imagine how much worse it's going to get.

This change will affect 1% of the population. Thirty thousand individuals will be affected. Although some of our elite do establish endowments and charitable organizations, most giving comes from the middle class.

These rich are the same ones who received the obscene bonuses.

I think that we can do a heck of a lot better job structuring the tax code so that few need to rely on charity.

I so agree with you kvmj!!! It's sad that some only give based on the tax write off they may get. I give because I feel its the right thing to do. I have NEVER claimed ANY of it on my taxes.

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kvmj, you aren't understanding this at all.

It doesn't just affect 1%. And regardless of what percentage - if that 1% rightfully possesses the money they have, didn't steal it, etc., then it is THEIRS.

What you fail to see is that whether or not they GIVE impacts literally thousands upon thousands of people. Right now, thanks to the stock market being where it is, people in that tier of wealth have seen how much they have cut in half or worse. That means they have less to give. And now, under his plan, if they DO choose to give, they won't get the tax break they used to.

The figures in my illustration are not the accurate figures, but they accurately reflect the principle I'm talking about.

Say Ivana Give gave $1,000,000 to a homeless shelter in 2008. And say she was able to fully deduct that $1,000,000 from her income taxes. So... she earned $5,000,000 and totally forfeited her right to use any of that $1,000,000 when she gave it to the homeless. Because of that, in the eyes of the law, she only has $4,000,000 that they will tax. Money that she puts back out into the country to use, of her own free will, is money she didn't "earn" in the eyes of the law, because she did not *use* it and gave it to an entity that the government had deemed a charity by giving them 501(c)(3) status. She can't give the money to her cousin and get that write off. She must give it to a 501 (c)(3).

The homeless shelter will have come to depend on her help. They'll have hired people, knowing they have a friend in Ms. Giver. They'll be feeding the needy and expanding their programs because they have a donor they can count on.

So now 2009 rolls around. Ms. Giver only earned $2,500,000 this year. Her tax adviser is going to tell her it's not a good time for her to give away $1,000,000 again to her favorite charity because her income has been cut in half, and that now represents 40% of her income rather than 20%. She says, "Okay, then cut my donation in half and let's give them $500,000."

Her tax adviser says, "Well, you really need to reinvest at least $X,XXX,XXX into your business with the economy as it is right now. It'll be tight, but you can afford to give away $500,000. The sad thing is though that while in 2008, given these same dollar figures, you could have given away $500,000 and in the eyes of the law only earned $2,000,000 for the year. Unfortunately, under Obama's plan, if you give $500,000 you only get to deduct half of that from your taxes, so your income on your tax form will show as $2,250,000. That extra $250,000 in taxable income means another $70,000 in taxes you will have to pay. Bottom line, if you want to give them $500,000, fine, but you don't get that great a tax break for it anymore. You'll have to pay an extra $70,000 in taxes."

And Ms. Giver says, "Then do you recommend that I cut my donation back to $430,000?"

And he says, "Unfortunately, I do."

So... the homeless shelter went from a $1,000,000 donation to a $430,000 one. Don't tell me that only hurts the top 1%.

And again - I don't care WHAT percentage it impacts - if it's someone's money, it's their money. I don't think the government has a right to figure out ways to confiscate it. It's their personal property!

Case in point: I help a non-profit that runs a center that assists students in need of academic support. There is a foundation to which we have always applied that has always been generous at a level that paid the full salary of a counselor who had a master's level education and twenty years experience in her field. It also paid for a number of testing supplies and promotional materials to get the word out about the services offered. When we heard back from the foundation this year, they were only able to give us half of their previous gift. The entity is now down an employee - that employee that was so highly credentialed and impactive had to be let go because her salary was out of the range of what the organization could pay. Now the others are working on overload and the kids aren't being serviced as effectively.

That foundation has advisers telling it how much to give and how much to bank, given where things stand right now. They have a responsibility to protect their assets. If they give away too much at a time when their assets are low they won't have much to rebuild on when the markets recover, so they have no choice but to be stingy.

Now imagine that that foundation were a *person* and finding out that they will no longer get the same tax relief for their generosity. Do you think that person would still give as freely? It's not about *not* being generous. People at that level of wealth understand that if they give too much away and don't retain enough capital that they will not be able to rebound when the economy does... and they want to be able to give big again someday, as well as earn big again someday... so they tighten their belts like the rest of us when it's warranted.

And if we make it TOUGHER for them to give by TAXING the money they are going to give away, we hurt the would-be recipients of those funds in ways untold.

That's nice of you jaz, but I don't think it's the job of the government to judge the *motives* of people who give money to charity. The bottom line is if they want non-profit agencies to exist, changing the tax code in a way that penalizes people who give big dollars does NOT help those agencies.

Another example... say you made $200,000 last year, a nice tidy sum of money.

You live with your parents and your mom cooks for you and you are self-employed and work from home.

Essentially, you have no expenses whatsoever, and so you decide to give the entire $200,000 away to a women's shelter.

Come tax time, you would still OWE taxes - around $60,000!

So next year, you don't give the whole thing away. You can only give $140,000 to the homeless shelter because you are going to have to hold back $60,000.

Those figures aren't exact, because he will still allow amounts to a certain level to be written off. But ultimately, individuals will have to hold back greater portions to pay the taxes on what they gave, which means smaller gifts in a climate when gifts are already reduced since people have less money.

ETA: kvmj, you said, "I think that we can do a heck of a lot better job structuring the tax code so that few need to rely on charity. "

I'd much rather people rely on charity than to see them rely on government assistance. Right now, we've structured our government assistance programs so that people get on and many never get off! Also, "charity" doesn't just mean food, shelter, and clothing for the poor in the eyes of the government. Battered women's shelters, PTA groups at schools, senior centers where the elderly can gather and quilt, take exercise classes, etc... there are many, many entities that we all enjoy that exist under the umbrella of 'charities'. And while most giving does come from the middle class, most *big* giving comes from the upper. When buildings are built in the name of a good cause, when wings are added onto children's hospitals and community centers are built, etc.... those things usually happen because of extremely large gifts from one or two donors and are rarely the result of thousands of $100 gifts.

I would rather that people rely on neither charity nor government. We will always have people who due to disability cannot work. I suppose we could just put them in a ditch somewhere along with the babies you so desire be born but whose mothers do not have financial means to care for them.

Unless you're including government assistance such as Social Security (which is paid for payroll contributions) or disability payments, all other forms of government are temporary in nature. Assistance to mothers with children do not receive assistance forever. Your "welfare queens" are pure myth.

The uber rich pay 60% of all taxes collected. They take 75 % of all the wealth created in this country. This needs to change. We have far too many people living in poverty with few opportunities to change their circumstances. These matters are far more important than having a place for the elderly to quilt. The middle class is shrinking.

Charitable contributions to for profit institutions like hospitals and universities are of little concern to me.

I don't think we should base our tax structure on providing a loophole for the super rich in hopes that they'll use it as a reason to give to charities. That's backassward.

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If this is going to be a Christian nation that doesn't help the poor, either we have to pretend that Jesus was just as selfish as we are, or we've got to acknowledge that He commanded us to love the poor and serve the needy without condition, and then admit that we just don't want to do it.

- Stephen Colbert.

You know that was really a nasty post. Wowitsdark did an excellent job of explaining how the change in the tax code will affect many more people than the uber rich. There certainly are "welfare queens" out there. Putting disabled people in a ditch? What the heck are you talking about? There will always be rich and poor people, for many reasons. We do not want a socialist country. Way to go wowitsdark for your very insightful explanation. Thanks for taking the time to explain this.

Then pray you never need the resources they provide.

So true, so true. If you ever write a book "wow" I'll buy it. You are an awesome writer!

There are no welfare queens anymore. It's limited to 2 years. Republicans constantly harp about a "welfare" state thinking that government should not do anything to help the poor, the old., the infirm. My ditch proposal is the alternative
you seek.

I'm not getting any younger. I will undoubtably need to use the services of a hospital one day. When I do, I expect to pay. I have already used the services of a university. I paid for that. I also paid for my son's education.

Even though Hospitals are profit institutions, they still hand out a LOT of charity. We ended up getting financial assistance when our son was born premature and in the NICU for 6 weeks. We even had insurance, but the amount we had to cover was so much, so we applied and were able to receive some financial assistance. If it hadn't been for Charitable contributions, we would have had so much more to pay. It was something we never thought we would have to use, but thank heavens it was there.
As for Obama, I didn't listen to his speech. He's going to be another Jimmy Carter, easily... the decisions he's making for this country could ruin it. This country wasn't founded on principals of socialism, and that's where we are headed.

Sorry to break the news for you, but you paid but a fraction of what it actually cost to educate you. Your money probably went to pay some overhead and some teacher salary expenses, but there's not a university in America that does not rely heavily on contributions from private individuals to remain in the black. If the buildings you learned in had names on them, it's probably because their families gave money towards those buildings. If you had any private scholarships at all... If any of your professor's positions exist because they were holding endowed chairs....

The cost of a college education would be astronomical - beyond what it already is - without the gifts of friends of the school. That is true for both public and private institutions.

I would be interested in what those of you who do not care for President Obama's plan think is the right way out of this mess we are in? Even though I didn't care for GWB, I still was able to give credit where credit was due...when 9/11 happened, I was one of those cheering and behind him all the way....until much later.

I didn't find fault with his plans unless I had thought of an alternative. Or are you all "whatever he does is wrong, I don't have an answer but I know that his answer is wrong". Just curious.

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President Bush actually did this exact same thing in 2002/2003 and donations actually increased!

Over 50% of all contributions go to religious charities and even in down times people still contribute to those organizations and it's usually the same or more.

__________________
"A true friend is someone who thinks that you are a good egg even though he knows that you are slightly cracked." ~ Bernard Meltzer

Honestly, regarding this particular issue (reducing the tax incentives that exist for those who give large sums of money to charity), I was shocked he even put it on the table. I didn't know it needed messed with.

In principle, I am more of a flat tax kind of a girl. If, however, that is not going to happen and we are going to continue to have a tax scenario that attempts social architecture, providing MORE incentives for people to be charitable, rather than FEWER incentives, is the way I think he needs to go.

For the record, I don't think there is anything wrong with saying, "I don't have an idea myself, but I can tell you that one he has stinks." You can spot "bad" without having formulated a plan yourself.

ETA: No welfare queens? What do you call Octomom?

I wasn't in the field I am now back in '02-'03, but if this is accurate, then I would have opposed that as well. If donations increased, there must have been something else happening... like economic recovery after what we went through on 9/11/00. I don't think an increased tax burden would have *caused* higher giving, but having more money in your pocket to give away *despite* a higher tax consequence to oneself might have.

But wait - I thought Bush only increased taxes on the poor and infirm and cut taxes on the rich. Did I dream that?

I can agree with that. Just that some people haven't found one thing that has gone right in the first three months of this presidency and I wondered if they had better ideas since they know what isn't going to work.....

And for the record, though I didn't bring up welfare queens nor Octomom, I don't think she is a welfare queen as much as immature and unthinking. I think she watched too much TV and if she is a welfare queen, so would John and Kate Gosselin except in J and K case, it worked. For Octomom, not so much. Her plan of public appearances, shows on TLC, donations overload, hasn't worked for her like it worked for the Gosselins. She is about two years too late and about three bricks short of a full load.

__________________
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RJB 3/18/60 - 5/22/04
We miss you, sweet brother
God Bless the USA!!!!! Praying for my Youngster son at United States Naval Academy, class of 2014!!

Bush gave a small tax cut to the middle class and 2 huge tax cuts for the uber wealthy.

Charities prosper moreso when they do not have to depend on the munificence of the few.

I don't think it caused it either, but it is an interesing fact.

The ecomony is the #1 reason giving is down, period. Who knows, if we are in recovery at the time this goes into effect in 2011 then maybe the numbers will go up again just because by then the economy will be doing better and people can again afford to donate to the things they haven't been for so long.

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"A true friend is someone who thinks that you are a good egg even though he knows that you are slightly cracked." ~ Bernard Meltzer

She will be able to receive assistance for 2 years. She will not be able to live like a queen either.

I call Octomom nuts.

Regardless of the comparisons w/Octomom and J&K+8, prior to the birth of the octs, it's my understanding that she was getting her nails done with money given to her by the government that was intended for the care of her children. To me, that makes her a welfare queen. It may not have been the original definition as coined by Reagan, but having babies keeps her on the dole... and she continued to have more - and receive more assistance - despite not having a job.

I realize she's the extreme example, but she is proof that there are ways to cash in on the system long-term.

If there was a flat tax, there would be no tax deductions. Ergo, no contributions from the uber rich.

If there was a flat tax, I would hope it would not be a flat 40%ish on everyone, like the tax Obama hopes to impose on high-earners.

She is and has been mooching off her parents. That's the only reason that she was able to divert funds from food and clothing for her kids to her nails. Is she responsible? No. But, those embryos were her "babies" and she wanted all of them.

If getting your nails done makes you royalty, this country is full of kings and queens.

I couldn't tell you about that. The only one who has ever done my nails is me.

She also apparently got hefty student loans and is, I believe, in default on them... and yet she still had money for the nails and the hair. Money she got from taxpayers.

So yes, IMHO, we do still have, if nothing else, little welfare princesses. Regardless of need, she was able to find a way to receive money from the government to use on non-necessities.

Obama to Octomom -- is it really all about the O??

__________________

Reading is Fundamental.

I think that if the Feds need to raise taxes than raise them. . .but reducing the incentive to give to charities isn't really the best way to go about raising revenue right now.

I kind of see it in really simplified terms. If you had $20 and you wanted to give away $10 to a charity and the the IRS was only going to tax you on the $10 you have left. You get $10, the charity gets $10 and Uncle Sam gets taxes on the $10. BUT now you would have that same $20, You would get $10, the charity only gets $5, Uncle Sam gets $5 plus the taxes on your $10. To me. . .let the charity keep their $10 and just raise taxes on the remaining $10 if you have to. Did that make any sense?

__________________
"No one believes more firmly than Comrade Napoleon that all animals are equal. He would be only too happy to let you make your decisions for yourselves. But sometimes you might make the wrong decisions, comrades, and then where should we be?"
- George Orwell Animal Farm

You said it MUCH better than I did, ham!

Got it. I guess there are so many different ways that the feds are going about trying to get us out of this mess, that this is just one of them. It may not work, but we won't know unless it is tried and we know that what we have now is broke...I say try anything. I will be the first one to say if I don't think something worked or not for me. I think that Obama is one who seems like he will say if something isn't working as well. JMO

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RJB 3/18/60 - 5/22/04
We miss you, sweet brother
God Bless the USA!!!!! Praying for my Youngster son at United States Naval Academy, class of 2014!!

That's not quite right. We don't think the govt should stay completely out of everything. Of course people need help sometimes. But you have to admit the handouts are way out of line. As far as Obnamas plan? I'm for letting businesses (car industry for exampe) fail or go brankrupt and re-organize if they can't make it. Isn't that what capitalism is all about? I'm tired of my money going for so much waste and so many entitlement programs. People need to get off their rear ends and work. For example, our town wants to spend $80k on a sculpture for a park when we need a new fire station and more police. At least people finally got mad and they are reconsidering this. We need to focus on needs not wants right now. Wowitsdark is right about private donations for hospitals and universities. It's pretty simple-we need the rich to want to donate.

And I would think that for private entities that serve the public good (hospitals, universities, battered women's shelters... the list is long!) would much rather court one big donor than have 1,000 bake sales @ $100 profit each time in order to get $100,000. It costs non-profits much less in terms of man hours (and the dollars those man hours cost!) to bring in one big gift than it does a thousand little ones.

According to this report that came out of Stanford, the middle class give more in relation to their asset bases, and the superrich give the most in relation to their income. http://www.ssireview.org/images/arti...nbergstone.pdf Generally speaking, the charts on that page show that the superrich give at a rate similar to the middle class - in some cases outpacing them substantially when talking percentages. It's the wealthy people who don't qualify as "superrich" (per the article) who don't give as much as the middle class.

And... it's the superrich that Obama wants to penalize.

I think that the people in your town should probablt find someone else to vote for the next time that you hold an election. So, you think that people are out of work because they're lazy? There sure were a lot of lazy people during the Great Depression. At one time, it was more than a third of the population.

Lets's throw people in the ditch. if you feel like being charitable, toss in a few coins as you go buy. Or, consider Swift's "Modest Proposal" as an alternative. That was his answer to people like yourself 300 years ago.
Jonathan Swift - A Modest Proposal

"People like myself"???
People in our town are starting to talk about voting in new people.
No, I don't think all people are out of work because they are lazy. But there are people who take advantage of the system, which causes a lot of problems. There is way too much of an entitlement attitude in this country. Just like people who are using food stamps who drive off in a nice car talking on their cell phone, etc...

Your quote above, Kathy is false to me. The truth is that food stamps are something that people can get because they fall on hard times. Nowadays, with the job market the way it is, people can one day be driving that nice car talking on that cell phone, get laid off, use the little savings they have because the last few years have had prices going through the roof and budgets being decimated no matter how hard you try. Now that same person qualifies for food stamps and though the nice car is the only transportation they have and the cell may be the only way any employer can reach them for that interview they had yesterday, you sound like you want them to give up the phone and sell the car so they can ride the bus and use a pay phone to get their messages.

Until we walk in those people's shoes it isn't really fair to say those people who get food stamps can drive what someone else considers a luxury. I hope that I am never in a position to need food stamps. But if I am, I hope it isn't' in Iowa. I would hate to think that I would need to give up my car that runs or my only phone to be able to satisfy people that I deserve them.

When I was younger, I thought terrible things about the kids on the Giving Tree during the holidays who wanted expensive things like a Gameboy or a Ninetendo. I thought "don't they know they are poor and this is charity?" Then someone who I admire told me that people who are poor want things just like others have and to worry about my own backyard and not theirs. Karma has a way of taking care of those people who need taken care of.''

As for entitlement, you bet I am entitled to food stamps. Any taxpayer is entitled to food stamps. As Americans, don't we want everyone to go to bed with a full tummy? Isn't that the Christian thing to do?

__________________
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RJB 3/18/60 - 5/22/04
We miss you, sweet brother
God Bless the USA!!!!! Praying for my Youngster son at United States Naval Academy, class of 2014!!

I think what the Feds really need to do is cut spending.

__________________
"No one believes more firmly than Comrade Napoleon that all animals are equal. He would be only too happy to let you make your decisions for yourselves. But sometimes you might make the wrong decisions, comrades, and then where should we be?"
- George Orwell Animal Farm

Well, that would seem like the logical thing to do but what a mess if we did. KWIM? If we stopped spending in Iraq and Afghanistan, imagine what that money could do. Food stamp money which is a topic on another thread...that program is a drop in the bucket compared to the war. But when we talk about cutting and saving, it is the one that directly affects Americans, how they eat, how they keep the lights on and keep warm, and that is the one that is trotted out as the one to cut. Interesting, isn't it?

__________________
GO NAVY WRESTLING!!BEAT ARMY!!!
RJB 3/18/60 - 5/22/04
We miss you, sweet brother
God Bless the USA!!!!! Praying for my Youngster son at United States Naval Academy, class of 2014!!

Just a question - I see "super rich" and "uber rich" mentioned. Just what is the level of income is that considered?

__________________
There are so many colors in the rainbow
So many colors in the morning sun
So many colors in the flower and I see every one!
-Harry Chapin

You're using logic? Why would we want to stop two wars just to feed people? Silly girl.

__________________

Reading is Fundamental.

Oh, yeah, forgot myself for a minute there....thanks for bringing me back to reality. It is more important to make sure that the people in a foreign country have the necessities than Americans who pay taxes in our own country. Silly me.

__________________
GO NAVY WRESTLING!!BEAT ARMY!!!
RJB 3/18/60 - 5/22/04
We miss you, sweet brother
God Bless the USA!!!!! Praying for my Youngster son at United States Naval Academy, class of 2014!!

Cutting spending, is tricky. There are probably ways to cut some things, but mostly when you cut spending you cut jobs and that is not what we need right now. As an example, I can even see a problem with bringing the troops home for that reason. What happens when they get here? Do we keep them in the military when we may not need them? Do they get released and become yet another drain on the job market? Or do they end up on welfare and in shelters like so many of the Viet Nam vets did?

Cutting spending sounds good but sometimes it is the opposite of what you really need to do. Cutting waste is another story. Changing the bidding rules and procedures would help a lot towards less waste.