Politics | Barack Obama Philanthropists Cry Foul Over Obama Budget Higher taxes, cap on deductions may lead to $4B less in charity By Jason Farago Posted Mar 10, 2009 9:19 AM CDT Copied President Barack Obama speaks about his fiscal 2010 federal budget, Thursday, Feb, 26, 2009, with Budget Director Peter Orszag, right, and Treasury Secretary Tim Geithner. (AP Photo/Charles Dharapak) Charity may be a virtue, but in America there's another motivation for philanthropy: generous tax deductions of as much as 35%. Barack Obama's proposed 2010 budget may change all that; not only will it raise taxes on the most wealthy to almost 40%, it will cap charitable deductions at a 28% rate. The double whammy has angered the world of philanthropy, already suffering from slowed contributions—and as NPR reports, the change might not make it into the final budget. A study by Indiana University estimates that tax changes could decrease donations to nonprofits by $3.8 billion a year. Max Baucus, chair of the Senate Finance Committee, said that the new rules "raise concerns," and Tim Geithner recently acknowledged that changes might be made. One accountant acknowledged that the groaning philanthropists are far from selfless: "In spite of the press that says things are not going to change, that people are motivated by goodwill, my clients mainly give for tax purposes." Read These Next James Carville has a new 4-word political mantra. "Theo" from The Cosby Show has died at age 54. Dog the Bounty Hunter shares unimaginably sad news. The weekend was full of not-so-great headlines about Delta. Report an error