11/14/2017 – (Updated) Statement of the Charitable Giving Coalition on 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 by Congressman Mark Walker (R-NC-6) and Senator James Lankford (R-OK) to extend a charitable giving incentive to non-itemizer taxpayers:
The Charitable Giving Coalition (CGC) applauds Congressman Walker and Senator Lankford for standing up for America’s charitable organizations and the communities they serve. Their legislation, The Universal Charitable Giving Act, companion bills in the House and Senate, 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.
The legislation 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 framework of tax reform. Research shows that the current tax plan will cause a precipitous drop in charitable giving–$13 billion annually. Expansion of a charitable contribution deduction to non-itemizers could help alleviate that loss. The CGC is working with economists to assess the potential impact of the Universal Charitable Giving Act.
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.
The introduction of The Universal Charitable Giving Act of 2017 shows that Congressman Walker and Senator Lankford understand both the current benefits of the deduction for charitable contributions and the consequences of tax reform proposals. The CGC is deeply appreciative of both legislators’ commitment to a finding a legislative solution and supporting the charitable sector
The CGC sees a universal charitable deduction as a fair and efficient resolution that will continue to encourage Americans to redirect their dollars to charities. The legislation 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, Senator Lankford 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.