Senator Wants National-Service Bill to Criticize Obama Deduction Plan

March 25, 2009

Senator Wants National-Service Bill to Criticize Obama Deduction Plan

Sen. John Thune, Republican of South Dakota, proposed today that the Senate amend a national-service bill to express its opposition to President Obama’s proposal to curb charitable deductions for the wealthiest taxpayers.

Mr. Thune, in a debate over the Serve America Act, introduced an amendment expressing a “sense of the Senate” that Congress should preserve the full income-tax deduction for charitable contributions “and look for additional ways to encourage charitable giving, rather than to discourage it.”

However, Sen. Barbara Mikulski, Democrat of Maryland — who is managing the bill on behalf of Sen. Edward Kennedy, Democrat of Massachusetts, who is ill — said the matter was not appropriate for the national-service legislation and should be taken up instead by the Senate’s budget or finance committees.

She asked Senator Thune to withdraw the amendment.

President Obama has proposed limiting tax breaks for itemized deductions, including donations to charity, to 28 percent starting in 2011 as a way to raise money for a plan to revamp the health-care system. Taxpayers in the top tax brackets can now get 33 percent or 35 percent for every dollar donated.

One day after President Obama defended the proposal at a televised news conference, Senator Thune said it would dampen giving at a time when charities are suffering from the economic downturn. “These organizations that educate our children, care for the sick and poor, and facilitate religious opportunities should not have to pay the price for additional spending on new federal programs,” he said.

Senator Mikulski, who is trying to get the Serve America Act adopted before Congress breaks for spring recess at the end of next week, said adopting the amendment would create “one more quagmire” in negotiations over the legislation with the House of Representatives.

She also said she supported President Obama’s budget and noted that the charitable-deduction proposal would affect a small percentage of households, especially since the majority of people who give to charity do not itemize their deductions.

“We believe these taxpayers, fortunate enough to be doing well and who also want to do good, will continue to give even if it’s a 28 percent rate,” she said.

Senator Mikulski told her colleagues she hopes they will be able to finish debate and vote on the Serve America Act on Thursday.

— Suzanne Perry

Comments

Senator Mikulski, like President Obama, just doesn’t get it. Yes, the wealthy taxpayer will likely continue to give generously. But, because the added incentive of a tax benefit was taken away — they won’t give even more. And because we know that 90% of many organizations’ income comes from 10% of their donors — this is going to hurt, and hurt bad.

— Kevin Feldman Mar 26, 03:49 PM #

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