June 25, 2010; Source: Wall Street Journal | Is this a trend for the future? Last year, to help the state balance its unbalanced budget, New York State eliminated all itemized deductions—except for charitable donations—for taxpayers earning $1 million or more. This year, the Governor and the Legislature seem prepared to cut back on charitable deductibility for the super-wealthy. The plan would reduce charitable deductions for taxpayers earning more than $10 million to 25 percent of their giving compared to the current limit of 50 percent. One of those who would be affected would be New York Mayor Michael Bloomberg, a billionaire who donated $254 million in 2009. A Bloomberg spokesperson suggested that the plan “sounds like it would really hurt charities and nonprofits that people rely on now more than ever.” The proposed change in charitable deductibility will barely dent the state’s $9 billion projected deficit. Will it affect charitable giving? Are the super-rich like Bloomberg earning more than $10 million a year really that motivated by a state income tax deduction? And if this passes in New York, might it be replicated in other states—or at the federal level?—Rick Cohen
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