Nonprofits Find Much to Like in Obama’s Tax Proposal

An interesting article from the Chronicle of Philanthropy explains that there may be something in the president’s budget proposal that nonprofits may appreciate. According to the article, the budget would ultimately “raise the capital-gains tax, paid on inheritances of money and property, from its current rate of 23.8 percent to 28 percent for high-income taxpayers. In addition, the tax plan would close what some tax experts call the ‘trust-fund loophole.’”  According to some, these provisions would incentivize wealthy taxpayers to bequeath a greater portion of their assets to nonprofits to avoid paying the hefty capital gains tax. However, this assumes that the President or Congress won’t put limits on the charitable tax deduction.

It is important to note that the President’s budget has already garnered a great deal of criticism from GOP law makers. One of the greatest points of contention comes from the increase in capital-gains tax. It will be interesting to see the final budget and how it may affect donor behavior.     

DAB