20 December 2017

ACR Statement on Passage of Tax Cuts and Jobs Act

WASHINGTON, D.C.— The Alliance for Charitable Reform (ACR) issued the following statement on the final passage of the Tax Cuts and Jobs Act.

“A vibrant economy generates the wealth that makes philanthropy possible and we applaud Congress for making economic growth a priority in tax reform. We also acknowledge lawmakers’ effort in trying to achieve tax simplification and for preserving the charitable deduction,” said Sean Parnell, vice president of public policy at The Philanthropy Roundtable. “Tax reform was an opportunity to increase charitable giving by expanding the charitable deduction to all Americans and strengthening our civil society. However, tax reform doubled the standard deduction meaning millions of taxpayers will lose the charitable deduction and this will reduce giving.”

Analysis from the Joint Committee on Taxation found that doubling the standard deduction will greatly reduce the number of Americans who will itemize. Research from the Lilly School of Philanthropy at Indiana University and the Tax Policy Center suggest this could reduce giving by between $12 billion and $20 billion.

While ACR is disappointed that Congress chose not to expand the charitable deduction, there was some good news for givers.

“The Tax Cuts and Jobs Act should drive more cash gifts to charities because of a change allowing individuals to give up to 60 percent of their adjusted gross income, more than the current 50 percent. Another high point is the repeal of the Pease limitation, which effectively taxed gifts to charity by certain high-income taxpayers,” said Sandra Swirski, executive director of ACR. “ACR fought for both of those measures. And while these measures and increased economic growth will not make up for lost charitable giving, it can help limit the loss.”