Charities fight possible changes on tax deductions

[TomCADem]

Source: USA Today

Most Americans who file income tax returns won't be affected by proposed changes in how charitable contributions are deducted because they don't itemize their deductions, federal income tax records show.

But that hasn't stopped charity officials and others from lobbying Congress to fight any change in deductions as part of the "fiscal cliff" negotiations. That's because they draw billions of dollars from donors who itemize, and a huge chunk of those donations come from taxpayers who earn more than $500,000.

That has placed advocates for the needy in the position of lobbying for the nation's most advantaged. Last week, a coalition of charity officials and recipients lobbied Congress for two days as part of what they called "Protect Giving – D.C. Days."

"If taxpayers get no benefit for deductible expenses above a certain amount, say $50,000, then there is no tax incentive to have expenses once the cap is reached," said Roger Colinvaux, an associate professor at the Columbus School of Law at Catholic University.


Read more: http://www.usatoday.com/story/news/nation/2012/12/09/charitable-deduction-lobbying/1750943/

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I wonder how the evangelical right is loving Republicans who are suggesting that the charitable deduction get gutted in order to preserve the Bush tax cuts for the top two percent.

Of course, now the GOP is alleging that the White House is "bullying" charities into supporting higher tax rates for the rich by pointing out that the GOP's proposal necessarily means that charities will bear a big hit.

[creeksneakers2]

1. Good point

And a higher basic rate would make deductions more attractive.

[SheilaT]

2. It is my understanding that our current

system of charities and non-profits in this country exist in good part because of the charitable tax deduction. I have occasionally read stuff that says if rich people couldn't deduct various donations, they might not give any money at all.

I can only speak for myself when I say I give to various charities because I want to support certain specific causes. I don't give enough to need receipts, and I actually probably give more than I can deduct when I itemize without specific receipts.

I am inclined to think our current system may be a good one and should be left in place, although I certainly am no expert on this topic.

[hollysmom]

3. It will hurt a lot of charities,

super rich won't give away when they don't get a benefit back.

I volunteer for 2 charities and we are very dependent on businesses to contribute. Although I will say that a lot of our usual donors will give anyway since they have a vested interest in the charity (aiding special needs children) but I would bet most businesses will drop us.

I itemize because of outrageous property tax (among highest for the country) and don't have to bother with listing charity deductions. Won't affect me, but for republicans who count on charities taking over for the government, they sure have a strange way of eliminating the possibility of the charities being able to do that.

[olddad56]

4. got to get rid of the charity deduction, helps the middle class and subseqently the poor.

can't have that

[ReRe]

5. Rule #1: Disregard anything that comes out of a GOP mouth.

K&R

But that was a good question, about how the religious evangelicals are taking the GOPs propaganda. But that assoc law Prof at Catholic University spoke up and told them. It's a fact, donations will go down to nothing if wingers can't get a tax deduction. I used to be involved with fund raising for a 501c3 and that was the first thing out of their mouths before they donated "Can we have a tax deduction receipt?" If the answer to that question is no, they won't donate. Period. Of course our org did give a written receipt that they could use for a deduction, but every time someone would ask that question, I cringed.

[factsarenotfair]

6. I don't think that eliminating or limiting the charitable deduction would

have a major impact on REAL charitable giving.

"...
The online fundraising platform give2gether cites the top 16 reasons that people give, and none of them has to do with tax savings. Topping the list are the ability to feel involved in something worthwhile, a sense of compassion, recognition for doing something good, and (in households where giving is ingrained) the desire to follow in their parents’ footsteps. Here’s another list of reasons that people give. Tax savings makes the cut at No. 6 but still is overwhelmed by intrinsic rewards.
..."
Read more: http://business.time.com/2012/12/07/why-limiting-the-charity-tax-deduction-wont-destroy-charities/#ixzz2Edrnv0Lu

[thesquanderer]

7. I agree. Deductibility over-rated.

Let's say that someone has a marginal tax rate of 30% (and of course, many wealthy people manage to get it well below that). So then giving $1000 to charity only "costs" them $700 because the other $300 would have gone to the government anyway. But it still costs them $700 out of their pocket. It still only makes sense for them to give if--what a concept--they actually want to help the charity. And if that's true, they will give either way. Is the concept of giving to charity because you want to help the charity so bizarre? It makes no sense to give ONLY because of the tax deduction, because you're still ending up with less money than you started, tax deduction or no.

I suppose you could make the argument that now they will only give $700 instead of giving the full thousand, so that their actual cost of giving remains constant. But while that sounds bad for charities, I think it is important to remember that the money is coming from somewhere. In effect, since the contributor is getting that extra $300 tax deduction that allows him to give an extra $300 to the charity at no apparent cost, it also means he is paying $300 less to the government... that is, the people's fund for all public purposes. So really, it is all the rest of us who are paying $300 to his choice of charity... it is $300 less available for government services, or $300 more that will be added to the debt if we spend it anyway, because someone decided the money should go to some particular charity instead. In effect, that's our money!

[factsarenotfair]

8. For example, the rest of us subsidize Bill Gates' "charitable" introduction of GMO agriculture into

Africa through his foundation. That is definitely not something I would choose.