Another Budget Buster

From Holden:

The Republicans are tapping the federal coffers to help the super-rich again.

A little-noted provision in the tax relief package to aid victims of Hurricane Katrina is shaping up as a windfall for charity and a drain on government coffers.

It allows donors who make cash gifts to almost any charity by the end of this year to deduct an amount equal to virtually 100 percent of their adjusted gross incomes, double the normal limit of 50 percent of income. The tantalizing prospect has set off a financial scramble among some wealthy donors and charities vying for their dollars.

“I just keep thinking there’s got to be a catch, they can’t really be doing this,” said C. Kemmons Wilson Jr., a Memphis businessman whose father was the founder of Holiday Inns Inc.

Mr. Wilson said that he and his siblings gave away several million dollars a year and that the amount could double this year because of the provision. “How many sales does the government have?” he said. “This is a big sale, and you bet I’m going to go.”

[snip]

Because of the strong interest, experts say the government may forgo more tax revenue than Congress anticipated when it passed the legislation. Based on information from 2002 tax returns, Robert F. Sharpe Jr., a fund-raising consultant whose clients include the American Heart Association and the University of California, Los Angeles, estimated that the provision would spur $4 billion to $10 billion in additional giving this year; 2005 giving was already expected to exceed last year’s total of $248 billion.

Mr. Sharpe said the additional giving would result in $1 billion to $3.5 billion in lost revenue for the Treasury, more than the $819 million Congress anticipated.