Thanks, DMA Nonprofit Federation, for passing along this article from Politco’s Ben Smith about how President Obama’s proposed budget affects non-profits.  A proposal in Obama’s 2009 budget that would reduce the value of deductions such as mortgage interest and charitable contributions for people in the highest tax brackets was widely assumed by many from all over the political spectrum to result in lower contributions to non-profits from the affected populations.  And as a result, the proposal was killed in the House.

But now, it’s back.  According to the Office of Management and Budget, here’s how it works:

Currently, if a middle-class family donates a dollar to its favorite charity or spends a dollar on mortgage interest, it gets a 15-cent tax deduction, but a millionaire who does the same enjoys a deduction that is more than twice as generous.

And to be fair, an opposite view for one of the commenters:

Here’s the real way it works. A dollar spent on mortgage interest or a charitable donation is currently not taxed. That means if you are in the 15% tax bracket, you don’t pay the 15 cents on that dollar. And if you are in the 35% tax bracket, you don’t pay the 35 cents. In other words, both the person in the 15% bracket and the person in the 35% bracket get to use the full $1 of their own money for mortgage interest or charity. [Emphasis, their own.]

The only “disparity” is between the tax rates charged on the middle-class and wealthier individuals.

Ben Smith expects “the same fierce pushback to the write-off change — and the same assumption on the Hill that it’s dead on arrival — as last year.”