Don't Limit the Charitable Deduction During the Lame Duck Session
As Congress reconvenes for the year-end lame duck session to address a number of looming priorities, including the expiration of the 2001 and 2003 tax cuts, reinstatement of the tax provisions commonly known as extenders (including the IRA charitable rollover and other giving incentives), sequestration, further deficit reduction, and setting the stage for comprehensive tax reform, there are reports that suggest limits to the charitable deduction may be under consideration to help pay for any number of these issues.
Proposals to limit or cap the charitable deduction are nothing new – in fact in the past few years we’ve seen:
- President Obama propose capping the charitable deduction at 28% for taxpayers earning above $250,000;
- Governor Romney propose an aggregate cap as low as $17,000 on deductions for all taxpayers, which would effectively eliminate the charitable deduction for most taxpayers (There have also been other proposals to place an aggregate cap on deductions, including one that would place a cap of 2% of AGI on deductions for all taxpayers); and
- A proposal from the Simpson-Bowles Commission to eliminate the charitable deduction and replace it with a 12% flat credit for donations above a 2% floor of AGI.
Contact your members of Congress and the President and urge them not to limit the charitable deduction in the lame duck session and to avoid deficit reduction and tax reform solutions that would increase poverty and widen income inequality. As nonprofits continue to see increasing demand for programs and services, our elected officials should support policies that encourage all Americans to give more to charitable organizations and protect the most vulnerable in our society.
**Please consider personalizing your letter in the opening paragraphs to tell your elected officials more about you, your organization and your work, and the impact of charitable contributions.**