Obama Says Charitable Giving Not Affected By Tax Increases

(AP)

President Obama defended his proposal to cut the rate for charity and mortgage deductions for the wealthy during his primetime press conference Tuesday. He said his policy shift should not be a deterrent to charitable giving.

"I think it's the right thing to do, where we've got to make some difficult choices," Mr. Obama said before launching into an explanation of his tax policy.

He referenced the tax plans of three of his predecessors when describing his alteration to tax rates for the wealthy.

"For the top 5 percent, they're the ones who typically saw huge gains in their income," he said. "I -- I fall in that category. And what we've said is, for those folks, let's not renew the Bush tax cuts, so let's go back to the rates that existed back in -- during the Clinton era, when wealthy people were still wealthy and doing just fine, and let's look at the -- the level at which people can itemize their deductions."

He said he decided to return to the rate that existed in the Reagan administration, at which "people are still going to be able to make charitable contributions. It just means, if you give $100 and you're in this tax bracket, at a certain point, instead of being able to write off 36 percent or 39 percent, you're writing off 28 percent."

Mr. Obama argued that the if the contribution is really charitable than his policy shift should not be a reason not to give.

"This provision would affect about 1 percent of the American people. They would still get deductions. It's just that they wouldn't be able to write off 39 percent," he said.

He added that this provision is "not going to cripple" the wealthy. "They'll still be well-to-do," he said. "And, you know, ultimately, if we're going to tackle the serious problems that we've got, then, in some cases, those who are more fortunate are going to have to pay a little bit more."

"There's very little evidence that this has a significant impact on charitable giving," Mr. Obama said.

"I'll tell you what has a significant impact on charitable giving, is a financial crisis and an economy that's contracting. And so the most important thing that I can do for charitable giving is to fix the economy, to get banks lending again, to get businesses opening their doors again, to get people back to work again," he argued.

Full Coverage Of Obama's Press Conference:

• By Topic: Budget | AIG Outrage | Tax Increases | Race | Mexican Drug Cartels | Israel | Funding For Veterans | Sacrifice


• Full Transcript


• Fact Check: Obama Having It Both Ways?


• Analysis: Philosophy Of Persistence | Grades From Marc Ambinder | Instant Reaction | Focus Group Weighs In


• Video:
  Recession To Recovery
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  Sacrifice
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  Budget
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  Stem Cells
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  Homeless Crisis

[SaintFrederick]

The problem has been caused by excessive spending by BOTH parties.

Also, it's doesn't matter what the intent of the giver of charity is, the fact is that they are giving to charity! So, if the government reduces the incentive to give to charity, the charities will receive reduced amount of funds! Period!

Remember, the top %5 of earners pay the vast majority of taxes to the government, so they're easy targets. But they also donate the most too. They invest the most, etc, etc. Reduce the exemptions for mortgages, guess what they're not going to do as much? Buy homes, build homes, etc. (less jobs for home construction and all the tricle down from that) If you think the rich are just going to throw up their hands and give in, you're crazy.

I thought this president was about change? It looks like he's using the same old techniques for gaining more revenue for government spending that has been done by past administrations. Tax and spend... errr no, spend and tax!

When you hear the President speak the words "...we've got to make some difficult choices." understand that SOMEONE is going to get hurt ultimately by his decision, and it will be us, directly or indirectly.

How does that song go... "Everything old is new again..." Don't buy the hype people.

[sjc_1]

I would favor phasing out mortgage interest deduction all together. It distorts the market and reduces revenue that we need to bring down our deficits.

While we are at it, we can rewrite the provision of Medicare Part B, where the government is prohibited from negotiating volume discounts on Medicare drug benefits.

There are many common sense approaches to more efficient government, but we have to remove the obstacles to practical reasoning.

[provocateurisque]

it's estimated that only 1% will be affected by this provision AND that instead of being able to write off 36% or 39% they'll only be able to write off 28%. there seems to be so much opposition for something that will only affect a tiny minority and for only about 10%.....what a lousy reason to donate (or not to donate): the tax effect.

[timetrips1]

There should be NO deductions at all. We should have strict rules on what is income and when it is considered "earned". The first 50K should be tax free, after that EVERYBODY pays 15% of total income, no exceptions, no deductions. Then there should be a national sales tax (percentage can vary by item). Then the rich would pay more if they spend more, otherwise if they are thrifty and invest they don't pay anything until the spend it. And finally the Government should not be able to spend more than it collects unless it sets up a "payment" plan to pay off what is borrowed within 10 years of borrowing it and those payments MUST be budgeted each year without borrowing to make the payments.

[diamruby]

I have always believed that charity was something you gave without seeking something in return. If the people that donate stop because they are not getting a tax break then they were not really donating to help people in the first place they were only looking for a tax write off.

[afmcalax]

I also love the lie of "class warfare." If this is class warfare then the rich have already won. Nothing that Obama said last night can be repudiated by a logical argument. The transfer of wealth to the few from the many over the last decade is unprecedented in American history. Everything Obama said was true last night from stagnating wages, to increased costs of health care to college tuition. The WORKING middle class has received nothing from the economic growth while the rich just rewrote all the rules to make themselves richer. Banana republics have this same divergence of wealth and it is not healthy for society over the long term. Balance needs to be restored. Wages need to be increased for the people doing the work. The age of entitlement for the corporate executives must end. I am amazed at people that still think they actually earned the compensation they granted themselves. What part of this economic disaster has not its roots in the greed of the corporate officer?

[mattcat25]

It's called Class Warfare - demonizing a class of people (in this case, successful people who have done well) and punishing them for their success.
Posted by Obama_the_Clown at 6:56 AM : Mar 25, 2009


It?s more like called TREASON by those that don?t think that they should have to pay their taxes
and, support anti-American policies through a political organization called the Republican Party.

[labrat9999]

mjvwsr .. See you in court! How truly shallow you are. You've totally missed the point. And if you are going to fire someone you ought to look around for the folks with the "W" sticker on their cars...they are the nutballs that got us into this mess. Lastly, I'm not to sure how much contact you have had in your life with the wealthy but I think you would be VERY surprised at how much taxes they don't pay, how much corporate pays for everything from their family outings to their mortage and food to everything in between while the rest of us middle class get stuck with the full tax burden. It is high time that the wealthy start filling the same pain that we in the middle have felt for years!! So nice tire!! Karl Rove is that you son parading around as blogger??

[mjvwsr]

I'll continue giving to charities but will be forced to lay off some employees. There won't be anymore Obama bumper stickers in the employee parking lot.

[hologram5]

It's called Class Warfare - demonizing a class of people (in this case, successful people who have done well) and punishing them for their success.
Posted by Obama_the_Clown at 6:56 AM : Mar 25, 2009
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This is drivel. It is proven historically that the repugnicans "trickle down" effect DOES NOT WORK. the rich get richer while the poor, well you know. That in itself is class warfare. use your head, not your pocketbook.