The tax changes proposed by President Barack Obama likely will not have a major effect on the giving patterns of most of the wealthiest U.S. donors, a new study says.
Obama aims to lower the deduction rate for people making more than $250,000 to 28 percent from 35 percent.
More than half of wealthy households, defined as those making $200,000 a year or having $1 million in net worth, or both, would not alter their giving, even if charitable deductions were wiped out altogether, says the new report on high net-worth givers from Bank of America and the Center on Philanthropy at Indiana University.
And only one in 10 wealthy people surveyed say they would “dramatically decrease” their contributions if the deduction rate went to zero.
“It is important to point out that there is a significant difference between receiving ‘zero deductions’ and reducing the maximum deduction rate to 7 percent, as the Obama administration proposes,” Bank of America says in a statement.
And while Obama has discussed increasing estate taxes, more than half of wealthy households say their giving patterns would not change if the tax were repealed, the study says.
More than one in three say they would somewhat or dramatically increase the amount they leave to charity if the estate tax were repealed, while about one in 10 say they would somewhat or dramatically decrease their giving if the tax were repealed.