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TAX REFORM CONCERNS

  • Several proposals include limitations on the deduction. For example:
  1. The House Republican Blueprint and President Trump’s Tax plan propose to vastly increase the number of taxpayers who take the Standard Deduction. This vastly DECREASES taxpayers who itemize – from 30% to 5%. Therefore, the charitable deduction will not be available to 95% of taxpayers.
  2. The Trump plan also places a hard cap on itemized deductions ($100,000 individual/$200,000 couples, joint filing).
  3. The nonpartisan Tax Policy Center estimates the Trump plan would reduce giving by 4.5 to 9%.
  4. American Enterprise Institute estimates the Trump plan could eliminate more than $17 BILLION in annual giving.
  • Other proposals have proposed a floor on the charitable deduction (such as the tax reform discussion draft from former Ways & Means Chairman Dave Camp.) Floors send a signal that smaller gifts are less valued – a particularly troubling message to middle- and lower-income donors.
  • The Congressional Budget Office indicated that a floor of 2% of Adjusted Gross Income (AGI) would reduce annual charitable giving by $3 billion.

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