"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