The White House says its proposal to limit the write-offs that wealthy people could claim for their charitable deductions would ultimately help nonprofits, even as opponents say the proposal would essentially amount to a “tax on soup kitchens.”
President Obama made the proposal as part of his job-creation plan, saying he would pay for the legislation by reducing the value of all itemized deductions, including housing and charitable gifts.
But the White House has faced strong criticism from nonprofits that say changes to the charitable deduction would punish charities that are providing crucial services to those in need.
Republican leaders have also criticized the plan. Last week, Rep. Eric Cantor, the Virginia Congressman who is House Majority Leader, published a blog post that characterized the jobs bill as a “tax on soup kitchens.” He said the limits on write-offs would harm charitable contributions.
“It doesn’t make sense to impose taxes on charitable contributions when the charities are the ones out there helping people,” Mr. Cantor wrote.
The White House, however, has highlighted a list of how the bill would help nonprofits.
“The President recognizes that roughly one in 12 workers in the United States are employed in the nonprofit sector, which is why he made nonprofits … a key part of this bill,” wrote Melody Barnes, the president’s domestic-policy adviser in a blog post.
Ms. Barnes said that if the entire jobs bill were passed, giving would rise.
“Far from a cap on charitable giving, this proposal continues to encourage giving, while helping make sure the jobs package is fully paid for,” Ms. Barnes wrote
Mr. Cantor’s post got heat from PolitiFact.com, a fact-checking project of the St. Petersburg Times. It found that Mr. Cantor’s blog post was “mostly false,” though it mainly objected to its headline and to calling a limit to the charitable deduction a tax on charities.
Last week, while answering questions about the bill, the president spoke about its effect on nonprofits. Watch here: President Obama Answers Questions on the American Jobs Act