Tax Reform and the Charitable Deduction
Republican Congressional leaders released their long-awaited tax reform framework which could have a negative impact on charitable giving.
We know that Arts Action Fund members care deeply about fully preserving the charitable tax deduction incentive since nonprofit arts organizations rely on donations made by individual taxpayers for approximately 25 percent of their budgets. Please read the statement from Arts Action.
- We commend the GOP proposal for preserving the charitable tax deduction for those taxpayers who itemize such qualifying expenses as mortgage interest and charitable gifts.
- However, the GOP plan also proposes to double the standard deduction. This would have the impact of moving taxpayers away from itemizing their deductions. While this change would simplify the average tax return, it would also have a negative impact on the future of charitable giving as whole. It is anticipated that this plan could cause charities to lose up to $13 billion in donations each year.
- Congress can avoid unintentionally harming charities by including a new “universal charitable tax deduction” provision that could be made available to ALL taxpayers, both itemizers and non-itemizers. With the incentive of a charitable tax deduction given to all taxpayers, it is anticipated that charities could see a $4.8 billion increase in donations per year.
Please take two minutes to help us urge Congress to expand charitable giving incentives to all American taxpayers. GOP leaders plan to move a tax package quickly through Congress by the end of this year, using this framework as the starting-point.