President Barack Obama recently proposed fiscal year 2012's budget, revealing a limit to the number of charitable tax incentives that will be made available to those that fall within the highest tax brackets. He said he wants to limit itemized deductions to 28 percent for tax payers who are among the well-heeled, an idea that is similar to one he introduced in last year's budget.
"While it's absolutely essential to live within our means, while we are absolutely committed to working with Democrats and Republicans to find further savings and to look at the whole range of budget issues, we can't sacrifice our future in the process," Obama said, according to the New York Times.
"Even as we cut out things that we can afford to do without, we have a responsibility to invest in those areas that will have the biggest impact in our future – and that's especially true when it comes to education," he added.
The new fiscal year begins on October 1, with this proposal reducing the value of itemized deductions for those people who fall within the top tax bracket by 30 percent. The top tax bracket, which is currently at 35 percent, will rise to 39.6 percent in 2013 without further action to extend tax cuts for those who earn more than $250,000 annually.
Additionally, the budget will cut back on or eliminate more than 200 programs, while still investing in education, transportation and research – areas that the country must back, the president told students in Baltimore, the New York Times reports. It would also cut billions of dollars of funding from domestic programs during the next decade, many of which are strongly supported by Democrats.
President Obama said he would push to end tax breaks for those falling within this income range when they expire in two years. He will also attempt to reduce the exemptions in estate tax, which cuirrently allow couples to pass on estates valued at up to $10 million to heirs, tax-free, the Chronicle of Philanthropy reported.