Wednesday, November 20, 2013

Bi-Partisan Support for Retaining Existing Limits on the Charitable Contributions Deduction?

The NonProfit Times reports that two United States Senators and Senate Finance Committee Members,  John Thune (R-S.D.) and Ron Wyden (D-Ore.), have drafted a letter to their leadership to urge maintaining the charitable contributions deduction.  The letter, timed to coincide with “Protect Giving Day,” garnered support from some 200 representatives of 140 nonprofit organizations.  The gist of the letter appears in the following excerpts, reported in the Times:

We write to you to underscore the importance of protecting the full value and scope of the charitable deduction during a comprehensive rewrite of the tax code ….  Analysis has repeatedly shown that proposals to cut, cap, or limit the charitable deduction could cause charitable donations to decline by billions of dollars annually. Worse yet, weakening the charitable deduction would most hurt the adults and children who receive vital charitable services from organizations like soup kitchens, after-school programs, and medical research projects, just to name a few.

The Times further reports that, at a congressional staff lunch attended by nonprofit leaders and tax policy experts, new research was presented concerning “the recession’s impact on charitable giving and the potential impact of limits to the charitable deduction.”  According to Dr. Arthur Brooks, President of the American Enterprise Institute, charitable giving is now at pre-recession levels, and the administration’s perennial proposal to limit the benefit of the charitable contributions deduction by treating donors as though their maximum marginal income tax rate were 28 percent (for purposes of calculating the deduction) “could cause giving to decline by nearly $10 billion in the first year.”


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