WASHINGTON, D.C.— The Alliance for Charitable Reform (ACR) released the following statement upon today’s release of the House Republican tax reform bill, H.R. 1, the Tax Cuts and Jobs Act.
“Tax reform should help increase charitable giving by protecting and expanding the charitable deduction, making it universally available to Americans of all income levels. Charitable giving is not just the province of the rich and we strongly encourage the House to include the universal charitable deduction in tax reform. It will not only unlock additional charitable giving, it recognizes the principle that all charitable gifts are analogous, regardless of whether they were given by a large or small donor. It will strengthen civil society and the voluntary associations that are a hallmark of this country,” said Adam Meyerson, president of The Philanthropy Roundtable.
As was anticipated, the tax reform bill doubles the standard deduction, reducing the number of itemizers from one-third of Americans to about five percent. According to IRS data, this would remove the tax incentive for an estimated $95 billion of annual charitable giving and could reduce giving by as much as $13 billion. Charities have rallied behind a universal charitable deduction as a solution to protect against the unintended consequences of an expanded standard deduction. One legislative option available to lawmakers is H.R. 3988, the Universal Charitable Giving Act of 2017, which was authored by Rep. Mark Walker (R-NC) and would expand the charitable deduction to all Americans.
“The Universal Charitable Giving Act is a step in the right direction and rightly acknowledges the effectiveness of the charitable deduction in encouraging taxpayers to support their communities. We thank Congressman Walker for introducing the bill and strongly encourage members of the Ways and Means Committee to include it in tax reform to protect charitable giving,” said Sandra Swirski, executive director of ACR.
H.R. 3988 would permit all Americans to take a charitable deduction, even those who do not itemize and opt for a standard deduction. It would allow non-itemizers to deduct charitable contributions up to one-third of the amount of the standard deduction. The legislation also preserves the current charitable deduction for those who itemize.