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Should Obama and Dems Limit Charitable Giving?






Should Obama limit charitable contribution deductions?
Yes, he and the Democrats know how to spend the money better than those who earn it
0%
 0%  [ 0 ]
No, if you give the money away you shouldn't pay taxes on it and you should decide where it goes
100%
 100%  [ 6 ]
Total Votes : 6

jmi256
Part of Obama tax increase involves limiting the deduction families and individuals currently receive when they donate their money to charities. So for example, if a family made $250,000 combined last year and donated $50,000 to charity it would pay taxes on $200,000 rather than the full $250,000. Besides their altruistic motives, this deduction has been a great motivator/reward for the rich to donate their money to worthy causes rather than letting the government seize it. Obama and the Democrats want to get rid of this deduction, however, and increase taxes to pay for more pet projects.

Nonprofits and charities are understandably concerned since they know that charitable giving will dip, exactly when the need for services will increase. Obama claims that he will give taxpayer money to charities of his choosing, but the amount pales in comparison to what individuals and families give and also lets government (i.e. Obama) decide what charities receive funds rather than the individuals who earned the money.

What do you think? Should people be forced to pay taxes on money they give away to worthy causes? Or should Obama and the Democrats be the ones who decide what your charitable donations are spent on?


Quote:

Charity tax limits upset many

Democrats and Republicans poured cold water on President Obama's budget plan to cut down on wealthy taxpayers' charitable giving tax deductions, the second of his ambitious cost-savings plans to earn lawmakers' scorn, and underscoring the legislative minefield he is entering.

By reaching so broadly with his $4 trillion 2010 budget plan, and the giant deficits it will incur, Mr. Obama put his hard-won election mandate on the line, saying if lawmakers want to do big things - from boosting education and clean energy technology to overhauling health care - they will have to find ways to pay for it.

From his plan to cut payments to farmers, which both parties all but ruled out this week, to his goal of a complex cap-and-trade system to control greenhouse gas emissions, lawmakers predicted Mr. Obama will have to survive challenges from political friends and foes alike.

"I work for the American people, and I'm determined to bring the change that the people voted for last November. And that means cutting what we don't need to pay for what we do," Mr. Obama said in announcing his budget.

Democrats pronounced the budget a good start and praised the president for undoing some of the budget gimmicks of the George W. Bush years. But they joined Republicans in worrying about long-term deficits, which increase from 2014 on through 2019, the end of Mr. Obama's budget projections.

"I think [Mr. Obama] himself has acknowledged that we've got to do more about the debt build-up that will occur over the following years. And so I think that becomes one of our significant ongoing challenges," said Sen. Kent Conrad, North Dakota Democrat and chairman of the Budget Committee.

He and members of both parties also fretted over the farm payment reductions, which Mr. Obama is counting on to save $9.8 billion over 10 years - part of the $2 trillion in savings Mr. Obama says he's identified.

Still, the charitable giving deduction reduction, which would limit deductions for couples making $250,000 or individuals making $200,000, provoked the most heat Thursday. Mr. Obama is counting on that provision to raise $179.8 billion over 10 years.

"Some of the reforms and offsets contained or referenced in the budget, such as the limitation on itemized deductions, raise concerns and will require more study as we determine the best policies for getting America back on track," said Finance Committee Chairman Max Baucus, Montana Democrat.

Roberton Williams, senior fellow at the Tax Policy Center, said it's impossible to calculate the exact effects of all the tax changes, but said the overall result is clear - less philanthropic giving.

"This will lead people to give less to charities if they behave the way they've behaved in the past," he said. "We've already seen a drop in giving as a result of the economic collapse. On top of that, this will just reduce the amount of giving."

Asked about that, Office of Management and Budget Director Peter Orszag said Mr. Obama took care of that by giving charities government money to make up part of the difference.

Rep. Paul D. Ryan, Wisconsin Republican, describes "the good, the bad and the ugly" of President Obama's 2010 budget plan Thursday on Capitol Hill. (Astrid Riecken/The Washington Times)

"Contained in the recovery act, there's $100 million to support nonprofits and charities as we get through this period of economic difficulty," he said.

He disputed that giving would drop, and said an economic recovery will help charities, too.

Many of Mr. Obama's proposals broke down chiefly along party lines, meaning they have a good chance of passage with both the House and Senate controlled by his party.

Republicans lined up in opposition, praising Mr. Obama for some cost-cutting in Medicare but arguing he turns around and spends those savings on more government programs.

"I mean, basically, what's happening here is we're taking four steps back in the deficit fight, and then we're only taking two steps forward," said Sen. Judd Gregg, New Hampshire Republican.

Democrats cheered his plan to return the upper two tax brackets to the levels they were before Mr. Bush's tax cuts and Mr. Obama's plans to boost Pell Grants for low-income students to attend college. Republicans said the tax increases will hurt small businesses the most, killing job-creation, and protested making Pell Grants a new entitlement program, meaning Congress could no longer control yearly spending for it.

Mr. Obama's goal of tackling greenhouse gas emissions may be tougher still. He is counting on raising $645.7 billion over 10 years by auctioning off carbon-emitting permits to polluters, and has given until 2012 before the program has to be up and running.

But cap-and-trade schemes have proved messy in places they've been tried, such as Europe, and Mr. Obama has left the details of the plan to be written by Congress, where Republicans may join with Democrats from industrial states to hamper his goal of an 80 percent reduction in emissions by 2050.

Another proposal, permanently indexing the alternative minimum tax for inflation so it doesn't apply to middle-income earners, is popular with both parties - but so costly that Congress struggles each year to find money to do it.

Mr. Orszag told reporters they understand the challenge, but believe lawmakers will realize there's no choice.

"I think you're raising a fundamental question, which is we're on an unsustainable fiscal course. There's not a single line in the budget that won't have someone who cares about it very strongly. And yet, if we allowed all of those lines to persist and grow over time, we would wind up with a fiscal crisis," he said.

"We recognize that it is difficult to turn direction, to shift direction in the federal budget, but that's absolutely what we need to do."



Source = http://www.washingtontimes.com/news/2009/feb/27/charity-tax-challenged-by-political-friends/
deanhills
jmi256 wrote:
What do you think? Should people be forced to pay taxes on money they give away to worthy causes? Or should Obama and the Democrats be the ones who decide what your charitable donations are spent on?
Looks as though Obama and the Democrats have already taken 1.2-trillion dollars from the citizens of the US with very little ceremony. So why worry about a fraction of it in taxes? Sort of does not make sense to kibble about little stuff, when there is something really BIG cooking! What I cannot understand is that CitiBank made a profit, and said it will not be needing bail-out money. So if that is the case, why aren't anybody talking about trimming the 1.2-trillion dollars? Perhaps this whole thing about taxes in the media is just a decoy from the real robbery of the century! Rolling Eyes
Voodoocat
Yet another stroke of genius from the boy blunder. Apparently Obama plans on paying the trillions of dollars of debt he has created be taking money from charitable contributions. I once say a Star Trek episode where Spock lost his brain and Dr. McCoy found it and had to replace it.

Where is our McCoy?
Afaceinthematrix
You shouldn't give money to charity just to receive tax benefits anyways. You should give money to charity because you actually care about the people/causes that you help.
deanhills
Afaceinthematrix wrote:
You shouldn't give money to charity just to receive tax benefits anyways. You should give money to charity because you actually care about the people/causes that you help.
It's a good attitude to have this. But then reality of the matter is that charities get most of their money from rich people who became rich by being savvy with money. If they can get a tax incentive for paying less taxes, then they will definitely use it, and the charities would be beneficiaries of that. The psychology of someone who worked hard for their wealth would be one of being motivated when the Government gives him/her tax incentives for investing in charities.
ocalhoun
Afaceinthematrix wrote:
You should give money to charity because you actually care about the people/causes that you help.

Exactly.

That's why you shouldn't have to give up to 40% less, because Obama took that much money away from you to give to people/causes you don't care about.
(especially for somebody like me, who would prefer to give to less mainstream causes.)
deanhills
ocalhoun wrote:
That's why you shouldn't have to give up to 40% less, because Obama took that much money away from you to give to people/causes you don't care about.
(especially for somebody like me, who would prefer to give to less mainstream causes.)
Can't understand the psychology behind this decision! Boggles the mind. Or is it just because the Obama Government wishes to do it differently than the Bush Government did, sort of one upmanship strategy? Totally does not make any sense. Talk about tax DISincentives Twisted Evil
ocalhoun
deanhills wrote:
ocalhoun wrote:
That's why you shouldn't have to give up to 40% less, because Obama took that much money away from you to give to people/causes you don't care about.
(especially for somebody like me, who would prefer to give to less mainstream causes.)
Can't understand the psychology behind this decision! Boggles the mind. Or is it just because the Obama Government wishes to do it differently than the Bush Government did, sort of one upmanship strategy? Totally does not make any sense. Talk about tax DISincentives Twisted Evil

^And it was you who asked why I was thinking of leaving this country, right?
^.^ One good reason is that the government wants to constantly grow and be involved in every aspect of your life... That's fine if you have a love/trust/co-dependent relationship with the government, but I surely don't.
deanhills
ocalhoun wrote:
^And it was you who asked why I was thinking of leaving this country, right?
Right .... got it .... Smile
ocalhoun wrote:
^.^ One good reason is that the government wants to constantly grow and be involved in every aspect of your life... That's fine if you have a love/trust/co-dependent relationship with the government, but I surely don't.
One good thing about this if Obama keeps this up is that his chances of being re-elected will be getting less and less soon. But yes, if things like these were important to me, it would have made me so mad when I turn on the television news, that I would have preferred to live in a country where when I turn on the news, it would not matter any longer.
jmi256
It’s easy for Obama and the Democrats to call for decreasing charitable giving when they aren’t charitable themselves. Obama gave only 6 ½% of his own money toward charity last year while Bush gave 23% in 2007. Biden averaged $369 (that’s right, no zeros after that) while Cheney gave a huge 75% of his own money.

Given the rash of people Obama has chosen to surround himself in his administration who have cheated on their taxes to pay less that "their fair share," I guess the only money Obama and the Democrats want to give away is the average US taxpayers’ hard-earned money.

Quote:

Bush was more charitable than Obama

In 2007, the Bushes donated 23% of their income to charity. In 2008, the Obamas donated 6 1/2%.

I won’t even go into Vice President Dick Cheney’s 75% to charity — $6 million — in a single year vs. the $369 a year average for 10 years by Vice President Joe Biden.

But I noticed that the White House made a big deal about the transparency in releasing a copy of their 1040s — “As another demonstration of the President’s commitment to openness and transparency, today the White House issued the following releases making the President and Vice President’s tax returns public.”

Big whoop.

Every president for years has done that.

Their combined income was $2,656,902. They paid $855,323 in federal income taxes. They donated $172,050 – 6.5% of their adjusted gross income – to 37 different charities.

Compare that to the Bushes: $719,274 in income, $221,635 in federal income taxes, $165,660 to charities — 23%.

This is typical behavior among liberal politicians and conservative ones. The conservatives give their money; the liberals give taxpayer money.

By the way, I notice the Obamas didn’t pay any extra taxes.


Source = http://blogs.dailymail.com/donsurber/2009/04/15/bush-more-charitable-than-obama/
ocalhoun
jmi256 wrote:

Quote:

This is typical behavior among liberal politicians and conservative ones. The conservatives give their money; the liberals give taxpayer money.


It's just an extension of their ideas about how the unfortunate should be helped.
If you believe that they should be helped by private charities, friends, and family, then you'll give your money or time to help those charities, or you'll help out your own friends and family in need.
If you believe that they should be helped by the government, you'll be all for increased government spending on the unfortunate, but won't give much yourself. (It's the government's job, after all, right?)
handfleisch
jmi256 wrote:


Quote:

Bush was more charitable than Obama

I won’t even go into Vice President Dick Cheney’s 75% to charity — $6 million — in a single year vs. the $369 a year average for 10 years by Vice President Joe Biden.



Source = http://blogs.dailymail.com/donsurber/2009/04/15/bush-more-charitable-than-obama/


Here's why:
http://taxprof.typepad.com/taxprof_blog/2006/04/kirsch_cheney_t.html
Quote:
Kirsch: Cheney Tax Return Shows Katrina Tax Benefits for Non-Katrina Charitable Contributions

CheneyMichael Kirsch (Notre Dame) points out an interesting aspect of the Vice-President's 2005 tax return:

It appears that the VP is a major beneficiary of the Hurricane Katrina tax relief act. In particular, he claimed $6.8 million of charitable deductions, which is 77% of his AGI -- well in excess of the 50% limitation that would have applied absent the Katrina legislation. The press release indicates that the charitable contribution reflects the amount of net proceeds from an independent administrator's exercise of the VP's Halliburton options -- apparently, the VP had agreed back in 2001 that he would donate the net proceeds from the options to charities once they were exercised.

The press release seems to confirm, at least implicitly, the VP's efforts to take advantage of the Katrina legislation -- it mentions that the Cheneys wrote a personal check of $2.3 million to the administrator in December in order to "maximize the charitable gifts in 2005." Admittedly, I don't know anything about the transactions beyond the info in the press release, but my gut reaction is that the personal check was given in order to make sure the independent administrator had sufficient liquid assets to pay all of the promised charitable contributions before the 50% limit returned on 1/1/06.

Despite the importance of the Katrina legislation to his tax return, it looks like none of the charitable contributions actually went to Katrina-related charities (the press release lists the 3 charitable recipients, all of which were designated in the original 2001 gift agreement). While there's nothing inappropriate about that from a legal perspective, it does demonstrate how the legislation, which was sold to the public as providing relief to Katrina victims, provided significant tax benefits to the VP (and potentially other wealthy individuals) in situations that have nothing to do with Hurricane Katrina.


in other words

Quote:
Cheney Profits From Katrina
Posted by Brooke Shelby Biggs on April 19th, 2006

A Notre Dame professor has analyzed Dick Cheney's 2005 tax return and concluded that our fair Vice President exploited a new tax law instituted post-Katrina to save himself several million dollars. It turns out that Smirky Dick used a loophole intended to encourage charitable donations for Katrina relief to write off charitable contribution which went to non-Katrina causes. That alone might not be enough to get irked about, except that it looks like the exploitation of the loophole was deliberate to minimize his overall liability, and he used Halliburton money to do it.

Cheney exercised some of his Halliburton options in late 2005, during which time that company's profits were soaring in part because of fat no-bid reconstruction contracts granted to its subsidiary KBR in the wake of Katrina. Cheney used those proceeds -- $6.8 million -- to donate to charities per his 2001 agreement to use his options only for charity.

Says the prof: "While there's nothing inappropriate about that from a legal perspective, it does demonstrate how the legislation, which was sold to the public as providing relief to Katrina victims, provided significant tax benefits to the VP (and potentially other wealthy individuals) in situations that have nothing to do with Hurricane Katrina."

Not illegal but definitely soulless, cynical, opportunist, and greedty. So, no big surprise.


http://www.corpwatch.org/article.php?id=13509
deanhills
How about your own opinion Handfleisch? This is a discussion forum, not a news buro. You're supposed to use quotes to back up discussion, not to replace discussion ... Rolling Eyes I wonder whether Cheney even knew about it at the time it happened. Usually people with millions employ their accountants to sort out their taxes, and the accountants' briefs are to maximize deductions where they can.
jmi256
handfleisch wrote:

Here's why:


I'm not sure what your counterargument is, if any. Are you trying to say that Cheney created some huge conspiracy removing limitations so that he could give away more of his money to charity? While I'm not a fan of your conspiracy theory nonsense, isn't giving more of your money away to charity a good thing?


My point is that Obama is seeking to limit our freedom to donate the money we earn to the charities we choose ourselves. Instead, he wants to confiscate that money through taxes and only provide money to charities he feels are worthy. At the same time he claims to call for this "shared sacrifice," but of course only if someone else is doing the sacrificing, as shown by the little he has given to charity compared to Republicans.
handfleisch
jmi256 wrote:
handfleisch wrote:

Here's why:


I'm not sure what your counterargument is, if any. Are you trying to say that Cheney created some huge conspiracy removing limitations so that he could give away more of his money to charity? While I'm not a fan of your conspiracy theory nonsense, isn't giving more of your money away to charity a good thing?


My point is that Obama is seeking to limit our freedom to donate the money we earn to the charities we choose ourselves. Instead, he wants to confiscate that money through taxes and only provide money to charities he feels are worthy. At the same time he claims to call for this "shared sacrifice," but of course only if someone else is doing the sacrificing, as shown by the little he has given to charity compared to Republicans.


What is the point in responding to you, or you even posting in the first place, if you can't or won't read? And when you take every fact that you don't like and call it "conspiracy theory" (that's making you look really stupid, by the way). My post showed "how the legislation, which was sold to the public as providing relief to Katrina victims, provided significant tax benefits to the VP [Cheney] (and potentially other wealthy individuals) in situations that have nothing to do with Hurricane Katrina." As the piece when on, "Not illegal but definitely soulless, cynical, opportunist, and greedty. So, no big surprise."

And Obama has plugged that loophole that allowed people to profit by dodging taxes when supposedly donating to charities, the way Cheney did (under the cover of Katrina relief). Get it? It can't be boiled down any simpler for you.
jmi256
handfleisch wrote:
jmi256 wrote:
handfleisch wrote:

Here's why:


I'm not sure what your counterargument is, if any. Are you trying to say that Cheney created some huge conspiracy removing limitations so that he could give away more of his money to charity? While I'm not a fan of your conspiracy theory nonsense, isn't giving more of your money away to charity a good thing?


My point is that Obama is seeking to limit our freedom to donate the money we earn to the charities we choose ourselves. Instead, he wants to confiscate that money through taxes and only provide money to charities he feels are worthy. At the same time he claims to call for this "shared sacrifice," but of course only if someone else is doing the sacrificing, as shown by the little he has given to charity compared to Republicans.



What is the point in responding to you, or you even posting in the first place, if you can't or won't read? And when you take every fact that you don't like and call it "conspiracy theory" (that's making you look really stupid, by the way). My post showed "how the legislation, which was sold to the public as providing relief to Katrina victims, provided significant tax benefits to the VP [Cheney] (and potentially other wealthy individuals) in situations that have nothing to do with Hurricane Katrina." As the piece when on, "Not illegal but definitely soulless, cynical, opportunist, and greedty. So, no big surprise."

And Obama has plugged that loophole that allowed people to profit by dodging taxes when supposedly donating to charities, the way Cheney did (under the cover of Katrina relief). Get it? It can't be boiled down any simpler for you.


Your post was nothing except yet another red herring, designed to distract from the issue. If you read the blog posts you cited yourself, you'd see that they agree that Cheney actually donated 77% of his income to charity. He wasn't "supposedly donating to charities" as you claim. The Katrina bill removed the limit on the amount a donor could donate (it was 50% of income beforehand). How exactly is donating your own money "dodging taxes"?

I'll try to illustrate the concept with an example for you. It's really not that hard to understand. If someone earned $1,000,000 and his tax rate is 50%, he would be liable for $500,000 in taxes ($1,000,000 x 50%). If before Obama's scheme to limit charitable contributions that person donated all his income to charity, his taxable income would be zero ($1,000,000 - $1,000,000 = $0 in taxable income). His tax liability would therefore also be zero ($0 in taxable income x 50% = $0). That seems far to me. He shouldn't have to pay taxes on income that he doesn't keep, but instead gives away to charity.
Under Obama's plan, however, after donating the income, he still has to pay taxes on it. So on top of the $1,000,000 that person gave to charity, he would have to pay turn around and hand over $500,000 to Obama. So now the guy is $500,000 in the hole. It doesn't take a genius to figure out that the guy won't be able to donate the full $1,000,000 to charity. In the end charities lose out since they will be unable to get as many donations.

But somehow Cheney giving 77% of your own money is deemed "definitely soulless, cynical, opportunist, and greedty" by you, and Democrats who donate little to none of their own money are ok? The supposed "loophole" you're trying to say Obama is closing is really a tax increase that hurts charities. When you limit the amount donors can give to charities, it means less revenue for charities to help those in need.

BTW... if you are upset about the nature of the content of the Katrina bill (I agree there were a lot of parts in it that were pork-filled and geared toward pumping money to the sponsors' campaign donors rather than helping those who the sponsors claimed to be helping), you should take the issue up with the sponsors of the bill. Also, I know there has been discussion about lack of understanding of the political system in the US by some more gullible/uneducated voters, but just so you know the vice president doesn't introduce bills. Congress does that. So your conspiracy theory that Cheney somehow orchestrated the bill to personally profit is W-A-C-K-O on a range of fronts.

Quote:

Congressional Black Caucus Introduces Hurricane Katrina Relief Legislation to Help Gulf Coast Residents

Source = http://www.house.gov/list/press/nc12_watt/cbc_hurricane_relief_bill.html
deanhills
jmi256 wrote:
I'll try to illustrate the concept with an example for you. It's really not that hard to understand. If someone earned $1,000,000 and his tax rate is 50%, he would be liable for $500,000 in taxes ($1,000,000 x 50%). If before Obama's scheme to limit charitable contributions that person donated all his income to charity, his taxable income would be zero ($1,000,000 - $1,000,000 = $0 in taxable income). His tax liability would therefore also be zero ($0 in taxable income x 50% = $0). That seems far to me. He shouldn't have to pay taxes on income that he doesn't keep, but instead gives away to charity.

Under Obama's plan, however, after donating the income, he still has to pay taxes on it. So on top of the $1,000,000 that person gave to charity, he would have to pay turn around and hand over $500,000 to Obama. So now the guy is $500,000 in the hole. It doesn't take a genius to figure out that the guy won't be able to donate the full $1,000,000 to charity. In the end charities lose out since they will be unable to get as many donations.

Awesome illustration thanks jmi. This really explains it well to me too. Has anybody pointed this out to Obama and does he know about it? The image he is projecting is one of doing good to charities, so would appear he is robbing charities with his new form of taxation so that he can spend more on programmes that he can attach his name to? Maybe get re-elected again? I wonder who his advisors were on this?
handfleisch
jmi256 wrote:

Your post was nothing except yet another red herring,


buy a dictionary

jmi256 wrote:
I'll try to illustrate the concept with an example for you. [blah blah here I go with my personal playing with numbers]


Wow, Jimi, did you make that up yourself? Coupled with your Tourettes-like inability to respond to anything without using the word "conspiracy", it's really impressive. I am sure the world will start getting their ingenious financial explanations from anonymous reactionaries on marginal websites. Why don't you start an accounting firm? It might get you out of the basement.
jmi256
handfleisch wrote:

Wow, Jimi, did you make that up yourself?


I said it was an example to illustrate the concept. If you have a better example, I'd like to see it. Yeah, I know things like numbers and facts can be confusing and scary, but you should give them a try.



handfleisch wrote:
Coupled with your Tourettes-like inability to respond to anything without using the word "conspiracy", it's really impressive. I am sure the world will start getting their ingenious financial explanations from anonymous reactionaries on marginal websites. Why don't you start an accounting firm? It might get you out of the basement.


I would consider that an attempt at an insult, except it comes from a guy who considers a site named "The Democratic Underground" as the end-all of forums and where he likes to revel in his conspiracy theories with the other kooks.
handfleisch
jmi256 wrote:
conspiracy theories with the other kooks.

If you ever want to be taken seriously, reconsider saying "conspiracy theory" for such things like that Cheney, and people in general, might sometimes avoid taxes. Every time you do, it just looks like a desperate response after you've been proven wrong.

Also, you'll look up logical fallacies and learn what they are, both so you can avoid using them and avoid erroneously accusing others of using them.
ocalhoun
handfleisch wrote:
jmi256 wrote:
conspiracy theories with the other kooks.

If you ever want to be taken seriously, reconsider saying "conspiracy theory" for such things like that Cheney, and people in general, might sometimes avoid taxes. Every time you do, it just looks like a desperate response after you've been proven wrong.

Also, you'll look up logical fallacies and learn what they are, both so you can avoid using them and avoid erroneously accusing others of using them.

Likewise, every time you use the phrase 'logical fallacies', you need to be prepared to point out, preferably using symbolic logic, exactly which kind of fallacy and where it is.
gandalfthegrey
Limiting charitable donations or the tax rebates given is plain stupid. I think the concern here is that people are trying to avoid paying taxes, and that many of these charities and foundations that the rich give to potentially have questionable purposes or donation disbursements.
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