“For 100 years, the Charitable Tax Deduction has been a landmark institution that exemplifies the charitable spirit of Americans. Protecting this deduction and expanding it to the greatest number of people possible encourages charitable giving by all socioeconomic levels. We are greatly disappointed that the final tax reform bill failed to protect and expand this deduction to recognize the impact of charitable gifts, regardless of size, to support those most vulnerable in American society and worldwide,” said Sr. Georgette Lehmuth, OSF, President/CEO of NCDC.
While the tax reform bill simplifies the federal tax structure by reducing the number of taxpayers itemizing their taxes, it has the unintended consequence of removing the tax incentive for an estimated 30 million taxpayers, resulting in an estimated decrease of $13 billion in annual charitable giving.
Along with our partners in the charitable sector across the county, we have urged Congress to mitigate these losses by increasing the standard deduction, expanding the charitable deduction to all Americans. Permitting all Americans to take a charitable deduction, even those who do not itemize and opt for a standard deduction, would encourage charitable giving.
A universal charitable deduction would not only help recoup the anticipated loss of charitable contributions, but would also promote fairness by allowing all taxpayers to deduct their contributions.
NCDC recognizes a number of positive items included in the final bill, including allowing itemizers to deduct charitable contributions of cash up to 60% of their adjusted gross income (AGI), increasing that limitation from the current 50% level. In addition, it repeals the Pease limitation, which had reduced the value of itemized deductions for higher income taxpayers.
“While there are some positive outcomes for charities in the final tax bill, they do not make up for the decreased availability of the charitable deduction, which is crucial in encouraging support of our missions. We support the protection of charitable giving incentives and strongly encourage lawmakers to consider legislation in this regard in 2018.” said Sr. Georgette Lehmuth, OSF.