Sarah Ford | January 20, 2015
Nonprofits Find Much to Like in Obama Tax Plan
By Alex Daniels
A higher estate tax, as envisioned in a proposal released by President Obama this weekend in advance of Tuesday’s State of the Union speech, would spur more charitable giving in the form of bequests and charitable trusts, according to some nonprofit tax experts.
The estate-tax increase was included in a broad proposal to raise taxes on the most wealthy Americans and reduce the burden on poor and middle-income taxpayers. His proposal would increase fees on big banks that are highly leveraged and expand tax credits for the working poor, child care, and college tuition.
President Obama’s proposal would raise the estate tax, paid on inheritances of money and property, from its current rate of 23.8 percent to 28 percent. In addition, the tax plan would close what some tax specialists call the “trust-fund loophole.”
Instead of taxing an asset, like a share of stock, at the price at which it was originally bought, the plan would tax any gains in the stock’s value when it is passed to others after the owner’s death. However, the plan would maintain an exemption for assets that are given to charity.
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