Estimated Impact of Obama’s Charitable-Deduction Proposals Detailed

Indiana University’s Center on Philanthropy has posted a paper explaining how it calculated how much giving would fall under proposals by President Obama to limit charitable deductions and raise the upper tax brackets.

The center announced last week that charitable donations would have dropped almost $3.9-billion in 2006 if the two measures had been in effect that year.

President Obama has proposed capping the tax break for itemized deductions on federal taxes, including donations to charity, at 28 percent as a way to raise money to help reshape the country’s health-care system. He has also proposed raising the upper tax brackets from 33 percent and 35 percent to 36 percent and 39.6 percent.

The Tax Policy Center has made a different calculation of how much giving would be affected if the two tax proposals were imposed in 2011, as suggested by the president. The center, a joint venture of the Urban Institute and Brookings Institution, projects donations would fall by $9-billion. The explanation is posted on the center’s blog, TaxVox.