Thursday, February 26, 2009

Obama: Not Quite Robin Hood

So, Obama has unveiled his $1.75 trillion budget. I've yet to see too many details on how the sciences are affected directly and when I do, I'll make some comments then on it.

But I wanted to point out something rather unusual (in my opinion) about how Obama is going to generate more money. Everyone knows that if you give money to a charity that the money is tax deductible, thereby providing some incentive for people to donate or at least, removing some of the burden. What is going to change in the USA is how much money people earning over $200 000 will get back from their donations. If the budget passes as it stands, Obama will reduce the incentive people earning over $200 000 have to donate to assorted charities.

(From the link previously)
The tax increase would occur by reducing the benefit the wealthy get on tax deductions. As one example, taxpayers in the current top tax bracket of 35 percent would see their tax deduction for every $1 given to charity drop from 35 cents to 28 cents.
Now, personally I don't have too many qualms about raising taxes on individuals who earn more than $200 000. Earning that much money people can afford to pay more taxes, its the middle and working class I care more about. But reducing the incentive people have to donate seems like a bad way to raise that money since it will reduce the amount of money that is donated to charities. As someone who once was a community organizer, I'd think Obama would know this.

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