From Yahoo News:
President Barack Obama's proposal to limit itemized tax deductions for high earners is running into opposition from key Democrats in Congress who worry that charities and the housing market would be hurt. Senate Finance Committee Chairman Max Baucus questioned Wednesday whether the proposal was viable, a day after his House counterpart also expressed reservations.So Obama wants to decrease the deductions for charitable donations on people making more than $250K a year, tacitly increasing their taxes, hopefully without having to say that he's raising their taxes.
Treasury Secretary Timothy Geithner said tax increases on families making more than $250,000 a year are necessary to make a down payment on health care reform and to limit future budget deficits. But, he said, he was willing to work with lawmakers on proposals they objected to.
But there are a lot of democrats on capitol hill that think this is a bad idea. Not because it would be a tax increase, though. Because it might hurt charitable donations. The funny part about that is that conservatives give more money to charities that liberals by as much as 30%
So the liberal senators and representatives, who give less money to charity according to the statistics, are concerned that the richest (apparently conservatives) won't give enough money to charity if they don't get a large deduction for it.
That was unexpected. Charlie Rangel, opposing a tax increase on "the richest Americans."
On Tuesday, Rep. Charles Rangel, chairman of the tax-writing House Ways and Means Committee, said he, too, had reservations about the proposal.
"I would never want to adversely affect anything that is charitable or good," the New York Democrat said.
Of course, republicans are fighting it, too:
I'll be honest, I think that charitable donations are only really charitable if you don't get anything from them except the feeling of helping someone less fortunate. If the only reason you give to charities is for the tax break, that's not really charity. It's greed. Keep your money and offset your taxes that way.
Republicans have been even more critical of the proposal, saying it would reduce charitable donations at a time when many charities are struggling.
"There are people with the means to help. Why would you make it harder for them to do it?" said Rep. Thaddeus McCotter, chairman of the Republican Policy Committee.