Obama's Budget More Harmful Than Good?

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Parts of President Obama's newly released budget outline is raising controversy among wealthier Americans.

Obama's plan will limit how much those making more than $250,000 can deduct on their taxes for mortgage interest and charitable contributions.

The changes would be gradual, according to The Wall Street Journal. Tax rates for the wealthy would be reduced to 28 cents on the dollar next year, down from the current 33 or 35 cents now.

But some fear the change will have a negative affect on the housing market and charitable giving, for one because it would reduce a big incentive to give.

"Cutting the duduction for mortgage interest really squeezes the taxpayer," Colin Hanna of Let Freedom Ring said.  His group promotes the principles of limited government.

"[And] if they start reducing... the tax deduction associated with charitable contributions there are going to be fewer of them," he added.

Click play for more of Hanna's comments.

It's unclear whether the $250,000 limit applies only to personal income or if it will also affect small business owners.

The cuts and tax deductions are meant to help raise the $634 billion Obama is seeking to overhaul the health care system. That hefty price tag, on top of his economic plan and a $410 billion spending bill passed by House Democrats, is raising concern among GOP leaders.

Republicans say the spending bill costs too much and is full of pork, though an ABC News investigation found that earmarks in the plan come from both parties.

A complete report on Obama's budget will not be released for at least a month.

Sources: CBN News, Wall Street Journal, Associated Press

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