Other Proposals to Reform the Charitable Deduction

The 28 Percent Cap: During his time in office, President Barack Obama proposed limiting all deductions, including the charitable deduction, from the current highest rate of 39.6 percent to 28 percent. President Obama proposed the cap in every budget he submitted to Congress. A 28 percent cap on the charitable deduction will reduce charitable giving by $9.4 billion in one year alone, according to research conducted by the American Enterprise Institute.

Tax Reform Act of 2014: In 2014, then-House Ways and Means Committee Chairman Dave Camp (R-MI) released the “discussion draft” of the Tax Reform Act of 2014.  While the Camp draft ultimately preserves the charitable deduction— a decision that ACR wholeheartedly applauds—it does alter the deduction in ways which would ultimately cause a significant reduction in charitable giving, including proposing a 2 percent floor. The 2 percent floor excludes donations from the charitable deduction that are below 2 percent of a donor’s adjusted gross income. ACR met with lawmakers about the Camp draft, which you can read more about here and here.

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