Wednesday, May 25, 2011

CBO: Options for Changing the Tax Treatment of Charitable Giving

The Congressional Budget Office released a report yesterday entitled Options for Changing the Tax Treatment of Charitable Giving.  The report reviews 11 options grouped into four categories:

  • Retaining the current deduction for itemizers but adding a floor.
  • Allowing all taxpayers to claim the deduction, with or without a floor.
  • Replacing the deduction with a nonrefundable credit for all taxpayers, equal to 25 percent of a taxpayer's charitable donations, with or without a floor.
  • Replacing the deduction with a nonrefundable credit for all taxpayers, equal to 15 percent of a taxpayer's charitable donations, with or without a floor.

The CBO evaluated the options with respect to their cost to the federal government (the "federal tax subsidy"), their effect on the total amount donated to charity, and the extent to which different income groups would benefit or be hurt by the proposed change.

LHM

http://lawprofessors.typepad.com/nonprofit/2011/05/cbo-options-for-changing-the-tax-treatment-of-charitable-giving.html

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