Possible tax changes could mean less for charities - KLTV.com - Tyler, Longview, Jacksonville |ETX News

Possible tax changes could mean less for charities

By Layron Livingston - bio | email
Posted by Ellen Krafve - email

TYLER, TX (KLTV) - They are already feeling the impact of this recession. Demand at East Texas non-profits and charities is on the rise, and now, tax changes in President Obama's proposed budget could limit how much money you're allowed to write-off on your taxes after you make your donations.

It is just one more punch some organizations hope won't knock them out.

"We're averaging over a hundred more meals a day compared to last year, right now," said Captain Zach Bell, with the Salvation Army of Tyler. "I depend upon this community and I know that they'll continue to step up and step out."

But will it? Peter Milne is a local tax attorney.

"Tax policy drives charitable giving," explained Milne.

Under the plan, couples making a quarter million dollars or more each year will only be allowed to deduct 28 percent of their donations, not the 35 percent allowed right now. So, say that couple donates $10,000 to charity. Instead of their taxes being reduced by $3,500, it would only be reduced $2800.

"Fine, if we're going to be limited to 28 percent, then that's what we'll give," said Milne.

Which he said translates to an overall loss for non-profits.

"If the policy of our country is that people and not government should support other people, then our tax policy is going to be structured such that it will encourage that giving notes," said Milne.

David Walton is executive director of Goodwill Industries. he doesn't expect his operations to be effected too much because they are not heavily cash-based.

"I don't think that anybody was trying to target the not for profits in any way shape or form," said Walton. "They were focused on how to increase our tax dollars to support the programs that are being implemented."

"President Obama is trying to find every avenue that he can find to offset the huge budget deficits," said Milne.

But at who's expense? Still, some optimism remains.

"My faith is in a community who steps up and meets the need," said Bell.

It's estimated that Americans donate more than $300,000,000,000 each year to charitable organizations. Of course, the provision will not be finalized until the budget is approved by Congress.

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