10/13/2017 – CGC Response to Introduction of The Universal Charitable Giving Act of 2017
WASHINGTON, D.C.— Jason Lee, chair of the Charitable Giving Coalition (CGC), a group of more than 175 charities and nonprofits from across the country, commented on legislation introduced last week by Congressman Mark Walker (R-NC-6) to extend a charitable giving incentive to non-itemizer taxpayers:
The Charitable Giving Coalition (CGC) applauds Congressman Mark Walker (R-NC-6) for standing up for America’s charitable organizations and the communities they serve. On October 5th, Congressman Walker introduced legislation that would provide taxpayers who do not itemize their tax returns a deduction for charitable contributions of up to one-third of the amount of the standard deduction. Under current law, taxpayers who itemize their deductions receive a tax incentive for contributions made to qualified charitable organizations, but non-itemizers do not. The CGC considers the bill a good first-step toward increasing incentives for charitable giving among those who do not itemize, and is analyzing how a nonitemizer deduction with the proposed limitation on the amount deducted would impact overall giving. These assessments are taking into account a sharp increase in the number of nonitemizers predicted under tax reform proposals.
Congressman Walker’s bill expands good tax policy, providing an incentive to more Americans to invest in their communities through charitable giving. A non-itemizer deduction will become even more critical within the larger tax reform framework. Research indicates that plan will cause a precipitous drop in charitable giving. Expansion of a charitable contribution deduction to non-itemizers could help alleviate the loss of up to $13 billion per year in charitable support for organizations across the country. The CGC is working with economists to assess the potential impact of Congressman Walker’s proposal
While the CGC does not oppose the current tax reform proposal to increase the standard deduction, the coalition and others in the nonprofit community have raised alarm about the negative consequence to America’s charities and the communities. Based on the general outlines of reform for the individual tax code provisions, the standard deduction would be greatly expanded and the number of itemizers dramatically reduced to only 5% of taxpayers. As a result, the charitable deduction will be available to only 5% of all taxpayers—causing a significant drop in contributions. In real terms, 30 million taxpayers who itemized in 2016 will no longer have the giving incentive and will be taxed on their charitable gifts.
Congressman Walker’s bill, H.R. 3988, The Universal Charitable Giving Act of 2017, confirms that the Congressman understands both the current benefits of the deduction for charitable contributions and the consequences of tax reform proposals. He is clearly committed to a finding a legislative fix. The Congressman is deeply familiar with the vital importance of charitable organizations in communities across our country and is committed to empowering taxpayers to direct funds to the social causes they choose.
The CGC has proposed a universal charitable deduction as a fair and efficient resolution that will continue to encourage Americans to redirect their dollars to charities. This will assure that contributions to charities are not taxed by the federal government and that taxpayers who currently take the deduction for their gifts will continue to be incentivized.
Furthermore, because the deduction will be available to all taxpayers, it could foster a culture of giving much earlier, providing an incentive to young taxpayers who are beginning to make their charitable investments in the communities and causes they care about.
The CGC and colleagues in the nonprofit community are committed to working through details of the legislation with Congressman Walker and other interested Members. The CGC’s priority is to support an effective and efficient bill that would incentivize the most charitable giving and impose the least possible limitations on that incentive. The CGC and its colleagues are currently assessing the potential impact of the proposed bill and identifying data that could inform further development.
Congressman Walker is the Chairman of the Republican Study Committee (RSC), which has served as the conservative caucus of House Republicans since its original founding in 1973. The RSC has over 150 members.
As Congress and the Administration aim to enact tax legislation that is good and fair for all Americans, the CGC will continue to advance the universal deduction as a solution to the expected loss in giving from the current tax reform proposals. The collective, unifying goal should be to ensure that America’s communities thrive and her charities remain strong, diverse and effective.
The CGC is a unique, unified voice representing a broad cross-section of nonprofit organizations from across the country. The CGC is dedicated to preserving a charitable giving incentive that ensures that our nation’s charities receive the funds necessary to fulfill their essential philanthropic missions. More than 175 organizations participate in CGC, including individual nonprofit organizations, large national and international charities, faith-based organizations and several associations and umbrella groups that represent the charitable sector.