OU, JFNA Slam Obama Plan To Reduce Deduction Rate

WASHINGTON (JTA) — Two national Jewish organizations criticized a provision in the Obama administration’s federal budget proposal that would reduce the tax deductibility rate of charitable donations.

The Union of Orthodox Jewish Congregations of America and The Jewish Federations of North America both released statements Monday objecting to the president's proposal, which would force taxpayers earning more than $250,000 to deduct contributions to charities at a rate of 28 percent rather than the current rate of 35 percent.

“Despite the fact that the White House had recently indicated that its tax reform proposals would not disincentivize large charitable gifts, today's Budget release is disappointing for America's charities and the millions we support, particularly during this time of economic distress,” William Daroff, vice president for public policy and director of JFNA's Washington office, said in a statement.

JFNA noted last week that the Obama administration emphasized in its “Blueprint for an America Built to Last” that it would maintain the deductibility rate of charitable contributions.

The Orthodox Union said in its statement that the decision to change the rate to 28 percent could reduce donations to American charities by $4 billion annually.

Nathan Diament, the OU's executive director of public policy, said his organization was “deeply concerned" over the budget plan and that it "is a recipe for harmful displacements and cuts in much-needed non-profit sector institutions and services.”

“The tax deductibility of charitable contributions is, apart from a person’s generosity of spirit, the most powerful tool America’s charities possess to raise funds that enable them to serve their brothers and sisters,” Diament said in the statement. "We are disappointed that despite the across-the-board protests this proposal has received from the charitable sector in past years, the President puts forward this harmful proposal yet again.”