11/13/2017 – CGC Support for Stabenow-Wyden Amendment to Create Non-Itemizer Charitable Deduction
WASHINGTON, D.C.— The Charitable Giving Coalition (CGC), a group of more than 175 charities and nonprofits from across the country, expressed its strong support today for an amendment to the Senate Tax Reform Bill to extend a charitable giving incentive to non-itemizer taxpayers.
The CGC calls on all members of the Senate Finance Committee to vote yes on an amendment introduced by Senators Debbie Stabenow (D-MI) and Ron Wyden (D-OR) that would allow an above-the-line deduction for charitable contributions. The maximum deduction would be limited to 60% of modified adjusted gross income and would phase out at higher income levels (by 3% for every dollar of taxable income above $266,700 for single taxpayers, $320,000 for married, and $293,550 for head of household.
Expanding the charitable deduction to non-itemizers is critical because the current tax bill would significantly reduce charitable giving. The tax bill doubles the standard deduction, which would dramatically reduce the number of itemizers by 30 million individuals to just 5 percent of all taxpayers. With far fewer taxpayers able to take advantage of the charitable deduction, giving is estimated to fall by $13 billion under the current tax bill’s provisions.
“We applaud Senators Stabenow and Wyden for introducing this amendment to help prevent almost 95 percent of taxpayers from being denied any tax benefits for giving to charity,” said Jason Lee, chair of the CGC. “Previous research has shown that adding a non-itemizer charitable deduction, and universally allowing all donors to take a deduction for their philanthropic gifts, offsets the projected loss of $13 billion annually from the doubling of the standard deduction.”
The Joint Committee on Taxation estimates that without any tax changes, 40.7 million taxpayers who itemize would typically deduct charitable contributions totaling $241.1 billion in 2018. However, if the Senate tax bill is enacted, the scenario changes: only 9.4 million itemizers would deduct charitable contributions totaling just $146.3 billion. This dramatic loss in charitable giving will generate significant, negative consequences for America’s charitable organizations and the constituents they serve.
The CGC had previously proposed a fair and efficient resolution to encourage Americans to give to charity: a universal charitable deduction available to all taxpayers. Research has shown that enacting a universal charitable deduction along with a doubling of the standard deduction would result in increasing giving of almost $5 billion annually.
“Tax reform is very complex, but the CGC’s priority is to support an effective and efficient bill that would incentivize the most charitable giving possible and impose the least possible limitations on those incentives,” said Lee. “As Congress and the Administration aim to enact tax legislation that is good and fair for all Americans, a collective, unifying goal should be to ensure that America’s communities thrive and charitable remain strong, diverse and effective.”