WASHINGTON (Oct. 2)
A new limit on allowable income tax deductions, contained in the budget agreement President Bush reached Sunday with congressional leaders, is not expected to adversely affect contributions to Jewish causes.
That brought sighs of relief from officials of Jewish charitable institutions, including community federations around the country.
“It worked out very well for us,” said Mark Talisman, director of the Washington office of the Council of Jewish Federations.
He explained that the new rule, which must still be approved by Congress, would restrict people earning $100,000 or more from writing off the first 3 percent of their total itemized deductions, not including medical expenses.
The rule applies not just to deductions for charitable contributions, but to deductions for such items as mortgages or state taxes.
“What we worried about was a cap on charitable deductions,” said Talisman. A cap would have limited the amount given to charity that could be written off.
The next worst scenario was a floor just on charitable deductions, but instead the floor was placed on the total of all deductions, he said.
Talisman said the congressional leadership was well aware of the Jewish community’s concern on this issue, because federations had made their views known to their local representatives.
Congress must still adopt the budget agreement, which has already raised a storm of protest on both ends of the political spectrum. The agreement mandates spending cuts in domestic programs, particularly Medicare, and raises taxes on such items as gasoline, cigarettes, alcoholic beverages and luxury items.