President Obama told the joint session of Congress that everything in his proposed $447 billion American Jobs Act "will be paid for. Everything."
A main source of funding for the bill would be to limit the income tax deductions for people who make over $200,000 a year, including the deductions people and/or couples can take for making gifts to nonprofit organizations and charities.
There is no indication that there would be any changes to corporate gifts or sponsorships, nor would there be any changes to deductions for married couples with an adjusted gross income less than $250,000 ($200,000 for individuals).
A basic breakdown on the jobs bill has now been released by the White House. The section in question reads, "…limit the value of all itemized deductions and certain other tax expenditures for high-income taxpayers by limiting the tax value of otherwise allowable deductions and exclusions to 28 percent." Right now, people in the top 35 percent tax bracket can write off 35 cents on every dollar they donate or spend on housing, medical expenses, etc.
According to the Chronicle of Philanthropy's analysis, "President Obama's plan means that a donation of $100,000 would save a donor $28,000 in taxes; $7,000 less than he or she would save today."
If this part of the bill passes and becomes a reality, the question will become, how much of an incentive is the tax write-off when it comes to making a donation?
Cory Norman, Assistant Producer at Dallas' Theatre Three says he and founder Jac Alder agree that the cap on deductions would not have much of an impact on them. "I don't think our donors are motivated to donate by a tax deduction. Instead, I think they donate to Theatre Three because they believe in and support the work we do," says Norman.
Shakespeare Dallas' Development Manager Jenni Stewart agrees. "Our patrons and donors are very passionate about our mission, quality of programming, and accessibility. They give to ensure our programs continue year after year and to make sure that we are able to maintain a low cost ticket price and donation-only performances of Shakespeare in the Park. Tax deductibility, for our patrons, is more an added bonus than an incentive to give," says Stewart.
Jody Ulich, President of the Arts Council of Fort Worth and Tarrant County, agrees that arts patrons are motivated by passion more than deductions, but she also says that the bottom line is a factor that cannot be ignored.
"We track when donations are made, and the majority come in during the last two to three months of the year," says Ulich. She says this indicates that some individual givers do wait until they get an overall picture of their financial situation before making a donation, and that that donation will be written off.
Ulich says that while the impact may not be a huge one, it would be felt. While she does not believe huge numbers of people will stop support the arts with donations, she does think it is very likely that the individual amounts may go down. "Instead of making a thousand dollar donation, they may make a $200 donation."
The American Jobs Act is still new, and like all pieces of legislation, it is a moving target. At this point it is impossible to know what, if any, parts of it will pass. President Obama has said that he would be willing to sign portions of the bill, and then push Congress for the rest later.