Financial Samurai

President Obama plans on limiting the tax break for charity deductions to 28%, penalizes those in the 33%, 35%, and soon to be 40% federal income tax brackets.  Since the overwhelming majority of charitable contributions come from households, and the overwhelming absolute dollar amount comes from those in the highest tax brackets, one can deduce charitable contributions at the margin will go down in 2011 and beyond.  Given this logical conclusion, why are Democrats and President Obama against helping others through monetary means?

Currently, if you are in the 25% tax bracket, you can save 25% in taxes due to your charitable contributions i.e. donate $10,000, save $2,500 off your tax bill.  Meanwhile, there is equality among those who pay the highest taxes at 35%.  35% tax payers can equally save 35% in taxes from their donations.  So far, so good.

Due to massive government pork spending it’s egregious that politicians now want to not only raise the highest marginal tax bracket from 35% to 40%, but also cut tax breaks on charitable contributions down to 28%!  That’s two slaps in the faces of hard working Americans and a punch in the gut for those who need the most help.

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