In a research analysis conducted by two reporters, Bloomberg News says that charities, particularly arts groups and universities, would see gift income drop under tax law changes proposed by Republican presidential candidate Mitt Romney.
The candidate’s promise to repeal the estate tax and limit the deductions of high-income earners would likely hit charities hard, according to the report. People who have fewer deductions tend to give less of their income to charities. And high earners would have less incentive to give if there is a cap on deductions, as Mr. Romney has proposed.
“Museums, medical researchers, and food banks have their livelihoods at stake in the 2012 election, in what would be one of the most significant changes to tax incentives for charities since Congress allowed the charitable deduction in 1917,” the report says.
Meanwhile, nonprofits have also raised concerns about some proposals by President Barack Obama, including a cap on charitable deductions, although Obama’s plan “would have a smaller effect than Romney’s,” according to the report.