Yesterday, President Bush and Vice Presdient Cheney released their tax information.  Cheney wound up getting a $2mm refund, mostly due to the fact that 80% of his family's income went to charity.  My dad and I argued a bit, first because he said that people like Cheney were just taking advantage of the charitable contributions loophole passed by Congress and I argued back that it couldn't be because the loophole was meant to benefit lower income people that couldn't normally take charitable deductions.  He then told me that the new law removed limits on contribution deductions which I didn't believe.

Turns out I was wrong.  The Katrina Emergency Tax Relief Act of 2005 did in fact allow people (basically the wealthy) to deduct contributions against 100% of their adjusted gross income as opposed to 50%.  It does seem that this saved the vice president hundreds of thousands of dollars in 2005.  That being said, excess charitable deductions could always be carried forward for 5 years, so even if Cheney didn't get the tzx break thgis year, he would have gotten it this year, or the next.

That being said, Cheney's contribution deductions were mostly due to the sale of three of his wife's books which were published and dedicated to charity well before Katrina happened.

I was also getting my thoughts confused by the push to allow non-itemizers to be able to deduct their chariable contributions which has been pushed for by many over the years, but hasn't bee passed into law (although there was a period of time during the Reagan administration when it was allowed.  Two-thirds of Americans can't deduct their charitable contributions becuase they don't itemize.