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Warren Buffett Favors Capping Charitable Deductions

He endorsed the idea in this ABC interview (it comes with about 30 seconds left to go). Certainly can't hurt at a time when Democrats are fighting amongst themselves over how to finance healthcare reform--and when even many Democrats have balked at the deduction-capping idea.

For what it's worth, capping the charitable deduction at 28 percent for affluent people (who would otherwise be able to save 35 cents on each dollar they give to charity, because that's the marginal tax rate they face) strikes me as a pretty reasonable/equitable way to finance healthcare. As one economist put it to me a few months ago, if the incentives for charitable giving came in the form of a tax credit rather than a deduction (which is to say, right off your tax bill rather than a way to reduce your taxable income), would anyone argue that affluent people should get a bigger credit? Well, a deduction is pretty similar analytically. It's not obvious why it should be treated differently.

--Noam Scheiber