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Trump Tax Reform Save For Charities Is Illusory

Thursday, April 27, 2017   (0 Comments)
Posted by: Jennifer Blair
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Trump Tax Reform Save For Charities Is Illusory
By Ashlea Ebeling | Apr. 26, 2017
Click Here for the original article in Forbes

In a bare bones tax reform outline issued today the White House says it intends to preserve the income tax deduction for giving to charity, so you’d think charities would be rejoicing. But it’s more complicated than that.

Yes, they’re applauding the fact that the outline preserves the charitable income tax deduction. But they’re fearful that another provision—doubling the standard deduction to $24,000 a couple--could decimate charitable giving.

The House tax reform blueprint said that a $24,000 standard deduction for joint filers would reduce the percentage of American taxpayers who itemize and take the charitable deduction from 25% (one out of four taxpayers) to 5% (one out of 20). Not to worry, the Blueprint says: Unleashing economic growth will support charitable giving. That sentiment was echoed today in the White House press briefing announcing the Trump Administration tax reform outline. “Economic growth, that’s what massive tax cuts and massive tax reform is going to do,” said Treasury Secretary Steven Mnuchin.

Charities fear that without the tax incentive, all those non-itemizers will be less generous. See This May Be The Last Year You Get A Charitable Tax Deduction.

“The notion of simplifying Americans’ income taxes sounds good in concept, but it would be a shame if, in the zeal to simplify taxes, Congress creates a crisis in our communities,” said Tim Delaney, President & CEO of the National Council of Nonprofits in a release in response to the tax reform outline.

When you hear how President Donald Trump is saving the charitable income tax deduction, he’s really saving it just for itemizers (and yes, they skew richer than those who take the standard deduction). “It’s not status quo,” said Delaney.

Charities have a solution: a universal above-the-line charitable deduction for all taxpayers, regardless of whether they itemize. Mnuchin said the President is holding listening sessions on tax reform, and the Alliance for Charitable Reform, a project of the Philanthropy Roundtable, is asking President Trump to hold a listening session with the nonprofit sector to examine the impact of his proposal and a universal charitable deduction on giving. A non--itemizer deduction could increase giving without decreasing Treasury revenues or adding to IRS burdens if implemented with a floor--restricting the deduction to charitable giving above a dollar amount or percent of income, according to the Urban Institute’s recent report, The New Debate over a Charitable Deduction for Non-itemizers.

 

Click Here for the original article in Forbes



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