Congress does something right, rejects Obama Plan

[StorminNorman]

Senate Rejects Obama Plan to Cut Tax Breaks on Charitable Gifts

By Brian Faler

April 2 (Bloomberg) -- The U.S. Senate rejected a proposal by President Barack Obama to finance an overhaul of the nation’s health-care system by limiting the ability of the well-to-do to take tax deductions for charitable contributions.

The chamber unanimously approved an amendment to a pending budget plan that rejects the proposal to limit the size of itemized deductions that can be taken by those earning more than $250,000.

Obama proposed using the estimated $318 billion such a change would generate to help finance a health-care overhaul, which he says will cost at least $630 billion. Lawmakers said they feared the effect of such a tax change on charities.

“The Senate sent a clear message to the president,” said Senator Bob Bennett, a Utah Republican who sponsored the amendment. “Charities benefit greatly from the donations made by individuals in this income bracket, and raising taxes on these contributions would be a disservice to Americans and the millions of charities across the country.”

http://www.bloomberg.com/apps/news?pid=20601087&sid=aAKl4RpzgwpY&refer=worldwide

 

[The Major]

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[Addendum]

Oh wow! You mean that I can write off donations to charity? I honestly never knew that before. That is so awesome! I am so giving to charitable organizations now that I have this newly discovered knowledge. Thank you Senator Bennett. Go you and stand tall sir. You deserve it.

 

[StorminNorman]

Obama's plan would of crippled charities, this was one of Barack's worst proposals he has made. I am pleasantly shocked Congress did this.

 

[StorminNorman]

Oh wow! You mean that I can write off donations to charity? I honestly never knew that before. That is so awesome! I am so giving to charitable organizations now that I have this newly discovered knowledge. Thank you Senator Bennett. Go you

 

[Handsome Rob]

Oh wow! You mean that I can write off donations to charity? I honestly never knew that before. That is so awesome! I am so giving to charitable organizations now that I have this newly discovered knowledge. Thank you Senator Bennett. Go you and stand tall sir. You deserve it.

Pres. Obama's tax plan, for better or worse, would have penalized charities. There are more options for reducing one's tax burden than by donating to charity. And, whether you want to criticize the taxpayer or not, at least some of them would probably donate less to charity and send their money to another transaction with a higher deduction rate. So, charities would suffer.

Senator Bennett is right--charities would suffer. Some people don't realize that, though. They're too focused on sticking it to the rich to see the bigger, more complex picture. I'm not saying you're one of those, but they are definitely out there.

 

[Addendum]

But it's not like more people are going to give to charities as a result of this proposal being shot down.

 

[StorminNorman]

But it's not like more people are going to give to charities as a result of this proposal being shot down.

No, but people may of stopped giving to charities had this proposal not been shot down. A lot of people donate to charities, in part, due to the tax write offs.

 

[Addendum]

But since the proposal was shot down, then the same amount of people are giving. Nothing changed.

 

[StorminNorman]

But since the proposal was shot down, then the same amount of people are giving. Nothing changed.

I don't think anyone argued that point...

 

[danielisthor]

I believe the write off is 39% for the "rich". I forget how much a "rich" tax payer has to donate to reach that level. Those of us making less than $250,000 or "the poor and middle class" only gets a 28% write off.

 

[Matt]

But since the proposal was shot down, then the same amount of people are giving. Nothing changed.

No one said it did. But people are not going to stop giving as a result and that is a good thing. Your logic is like saying, "A fire fighter saved a life, but no life was made. Nothing changed."

I believe the write off is 39% for the "rich". I forget how much a "rich" tax payer has to donate to reach that level. Those of us making less than $250,000 or "the poor and middle class" only gets a 28% write off.

It has nothing to do with how much you make or if you're poor or middle class. The more you give, the more you can write off. It makes sense to me. You are better rewarded for giving more to charity. Why does everything have to have an "us versus them," class war mentality?

 

[Scarlet spidey]

This is great news! Unexpected, too!

 

[bell110]

Yeah, if I had the money, I'd totally give to charity to get that tax write-off.

 

[Malice]

No one said it did. But people are not going to stop giving as a result and that is a good thing. Your logic is like saying, "A fire fighter saved a life, but no life was made. Nothing changed."



It has nothing to do with how much you make or if you're poor or middle class. The more you give, the more you can write off. It makes sense to me. You are better rewarded for giving more to charity. Why does everything have to have an "us versus them," class war mentality?

Matt....there are Hundreds of Thousands of people who donate ONLY because its a tax-writeoff.. Their Tax guy calls and explains...then the husband and wife pick something that sounds nice and tell him to donate x amount of money....that is trully how it happens with alot of them (I know some tax guys and its THAT simple sometimes)

This would have killed...and I mean KILLED a number of charities...

 

[Handsome Rob]

I believe the write off is 39% for the "rich". I forget how much a "rich" tax payer has to donate to reach that level. Those of us making less than $250,000 or "the poor and middle class" only gets a 28% write off.

Currently, any "tax rate" tied to the charitable deduction is not based on how much is donated but on employees income. I'll give an example. Let's say there are two tax rates, 10% for income up to $50,000 and 20% for higher than that.

Asa makes $50,000 and donates $5,000 to charity. Before the deduction, his tax liability would be $5,000 ($50,000 * 10%). After the donation, his tax liability would be $4,500 ($50,000 - $5,000 = $45,000. $45,000 * 10% = $4,500). So, because that $5,000 would have been subject to $500 worth of tax had he not donated it, the "tax rate" on his deduction is 10% ($500/$5,000 donated).

Hortense makes $100,000 and donates $5,000 to charity. Before the deduction, her tax liability would be $20,000 ($100,000 * 20%). Afterward, her tax liability would be $19,000 ($100,000 - $5,000 = $95,000. $95,000 * .2 = $19,000). So, because that $5,000 would have been subject to $1,000 worth of tax had she not donated it, the "tax rate" on her deduction is 20% ($1,000/$5,000 donated).

There is no real tax rate on deductions--there's only a reduction in the amount of tax subject to a specific tax bracket by the removal of that money from taxable income. If someone's donation actually drops their top bracket from one level down to another, then the deduction would result at savings in two tax rates--the amount applied to the first rate, and the amount applied to the lower rate. This is why people in the top tax bracket get a higher reduction in their tax liability than people in the bottom bracket by donating to charity. It has everything to do with the tax rate the money would have been taxed at had it not been donated to charity. That's what is saved.

 

[metr0man]

Is it really necessary to frame threads in such a hyper-partisan manner especially when you know many people don't agree with the start premises? Can't you just title the thread 'Congress rejects Obama plan for charities' and let the two sides debate it out in the thread?

 

[SuBe]

Is it really necessary to frame threads in such a hyper-partisan manner especially when you know many people don't agree with the start premises? Can't you just title the thread 'Congress rejects Obama plan for charities' and let the two sides debate it out in the thread?

Yes. Since the General Election, and the Sarah Palin Thread had "I can see Russia from my House" in the title. It's good to go.

 

[SuBe]

Currently, any "tax rate" tied to the charitable deduction is not based on how much is donated but on employees income. I'll give an example. Let's say there are two tax rates, 10% for income up to $50,000 and 20% for higher than that.

Asa makes $50,000 and donates $5,000 to charity. Before the deduction, his tax liability would be $5,000 ($50,000 * 10%). After the donation, his tax liability would be $4,500 ($50,000 - $5,000 = $45,000. $45,000 * 10% = $4,500). So, because that $5,000 would have been subject to $500 worth of tax had he not donated it, the "tax rate" on his deduction is 10% ($500/$5,000 donated).

Hortense makes $100,000 and donates $5,000 to charity. Before the deduction, her tax liability would be $20,000 ($100,000 * 20%). Afterward, her tax liability would be $19,000 ($100,000 - $5,000 = $95,000. $95,000 * .2 = $19,000). So, because that $5,000 would have been subject to $1,000 worth of tax had she not donated it, the "tax rate" on her deduction is 20% ($1,000/$5,000 donated).

There is no real tax rate on deductions--there's only a reduction in the amount of tax subject to a specific tax bracket by the removal of that money from taxable income. If someone's donation actually drops their top bracket from one level down to another, then the deduction would result at savings in two tax rates--the amount applied to the first rate, and the amount applied to the lower rate. This is why people in the top tax bracket get a higher reduction in their tax liability than people in the bottom bracket by donating to charity. It has everything to do with the tax rate the money would have been taxed at had it not been donated to charity. That's what is saved.

I prefer the FairTax that has 0% Tax Rate on Income, and 0% deductions on Donations. Much, Much easier.

 

[Malice]

Is it really necessary to frame threads in such a hyper-partisan manner especially when you know many people don't agree with the start premises? Can't you just title the thread 'Congress rejects Obama plan for charities' and let the two sides debate it out in the thread?

metroman you are right....I think like the title...but we should try to keep the thread titles more neutral...the conversation IN the tread can lean whichever way...

 

[SuBe]

metroman you are right....I think like the title...but we should try to keep the thread titles more neutral...the conversation IN the tread can lean whichever way...

I would think that it should have been an issue ever since the Primaries or the General Elections when we had all those threads with defamatory titles on McCain, Bush or Palin or any other Republican. But, it wasn't, now that it is against a Democrat Congress, it's an issue?

 

[metr0man]

Yes. Since the General Election, and the Sarah Palin Thread had "I can see Russia from my House" in the title. It's good to go.

And those were such GREAT thread titles

Thanks for making my point for me.

 

[SuBe]

And those were such GREAT thread titles

Thanks for making my point for me.

I agree, I think the Politics Section should be held to a more mature standard than the rest of the Hype. I'm just wondering why is it an issue when it is against Democrats, and not one when it's against Republican.

Joe Biden gets "Uncle Badass". Palin gets (paraphrase) "Miss Dumbass".

Just because the Majority of the Posters in the Politics Section voted for Obama, doesn't mean that it is ok to Slam one Political Party, and Praise another.

 

[danielisthor]

Currently, any "tax rate" tied to the charitable deduction is not based on how much is donated but on employees income. I'll give an example. Let's say there are two tax rates, 10% for income up to $50,000 and 20% for higher than that.

Asa makes $50,000 and donates $5,000 to charity. Before the deduction, his tax liability would be $5,000 ($50,000 * 10%). After the donation, his tax liability would be $4,500 ($50,000 - $5,000 = $45,000. $45,000 * 10% = $4,500). So, because that $5,000 would have been subject to $500 worth of tax had he not donated it, the "tax rate" on his deduction is 10% ($500/$5,000 donated).

Hortense makes $100,000 and donates $5,000 to charity. Before the deduction, her tax liability would be $20,000 ($100,000 * 20%). Afterward, her tax liability would be $19,000 ($100,000 - $5,000 = $95,000. $95,000 * .2 = $19,000). So, because that $5,000 would have been subject to $1,000 worth of tax had she not donated it, the "tax rate" on her deduction is 20% ($1,000/$5,000 donated).

There is no real tax rate on deductions--there's only a reduction in the amount of tax subject to a specific tax bracket by the removal of that money from taxable income. If someone's donation actually drops their top bracket from one level down to another, then the deduction would result at savings in two tax rates--the amount applied to the first rate, and the amount applied to the lower rate. This is why people in the top tax bracket get a higher reduction in their tax liability than people in the bottom bracket by donating to charity. It has everything to do with the tax rate the money would have been taxed at had it not been donated to charity. That's what is saved.

Thanks for clearing that up for me.t:

 

[StorminNorman]

Is it really necessary to frame threads in such a hyper-partisan manner especially when you know many people don't agree with the start premises? Can't you just title the thread 'Congress rejects Obama plan for charities' and let the two sides debate it out in the thread?

metroman you are right....I think like the title...but we should try to keep the thread titles more neutral...the conversation IN the tread can lean whichever way...

I have no problem with this title being changed if you change the Biden thread title. I would have a real problem if this thread title was changed.

Also calling Congress incompetent isn't hyper-partisan since...you know...its both parties.