CMA lobbies to protect your charity gift tax deduction

Excerpted from "Top senators lobby for charitable deduction," published in The Hill, November 20, 2013 - Two senior tax writers are lobbying to ensure that the charitable deduction remains intact in any tax overhaul. Sens. John Thune (R-S.D.) and Ron Wyden (D-Ore.) say in a new letter that deduction's full value should be kept, to reiterate the government's "long-standing dedication to encouraging private acts of charity and compassion."

"The charitable deduction is unique. It is the only provision that encourages taxpayers to give away a portion of their income for the benefit of others," Thune and Wyden wrote to Senate Finance Committee Chairman Max Baucus (D-Mont.) and the panel's ranking member, Sen. Orrin Hatch (R-Utah).

"For this reason, it is not a loophole, but a lifeline for millions of Americans in need."

Charitable groups have long made a similar argument for leaving the deduction alone in tax reform or deficit reduction efforts. Scrapping the tax break, those groups say, would put a dent in their services, putting more strain on state and local governments that would be forced to make up the difference. President Obama has long called for capping itemized deductions at 28 percent, instead of the top individual rate, currently 39.6 percent.

Commentary

CMA VP for Govt. Relations Jonathan Imbody– “I met with Senators Thune and Wyden some weeks ago to discuss strategies to protect your charitable gift tax deduction and also the idea of sending this letter. Along with colleagues in the non-profit sector, I have been lobbying many lawmakers to help them recognize that the government should not tax you for money you give away to help others.

“Politicians taking aim at eliminating or limiting the charity gift deduction are playing with political fire. Two out of every three Americans (67 percent) oppose reducing or eliminating the charitable tax deduction.ⁱ Some other reasons to keep the charity deduction:

• Any weakening of tax deductions—whether capping the amount you can give or eliminating the deduction if you only give a certain amount—ultimately hurts the people helped by charitable organizations. Experts estimate that changing the charity tax deduction will decrease giving by up to $78 billion.ⁱⁱ
• Cutting charity is not a revenue generator for the government. Any drop-off in charitable giving caused by tinkering with the deduction means the government will have to begin paying for the social services no longer provided by charities.
• One in 10 Americans works for a non-profit, so cutting charity means threatening up to 13.5 million jobs.ⁱⁱⁱ

“I hope you will take a moment to click on this link and use our easy form to send a pre-written note to your legislators, urging them to protect charity by preserving the charitable gift tax deduction. Thank you.”

ⁱUnited Way Worldwide survey, Nov. 29, 2012. http://www.unitedway.org/press/release/americans-agree-charitable-tax-deduction-vital-to-nonprofits/
ⁱⁱ"Should We End the Tax Deduction for Charitable Donations?" Wall Street Journal, Dec. 14, 2012. http://online.wsj.com/article/SB10001424127887324469304578143351470610998.html
ⁱⁱⁱ "Protecting America’s Strong Tradition of Giving," Charitable Giving Coalition website. http://protectgiving.org/about/charitable-giving-coalition/

Resources

Tax reform drive threatens deductions and charity
CMA lobbies senators to protect charitable gift tax deduction

Action
Use our Freedom2Care pre-written message to tell your legislators to preserve the charity tax deduction.