Tax breaks for charitable giving still necessary

The Hill’s recent story on proposals to reduce tax breaks for charitable giving (“Tax break for charitable giving targeted,” March 27) did a good job of highlighting the Obama administration’s proposal to limit the charitable deduction wealthy taxpayers receive but did not sufficiently underscore the dire consequences of this proposal.

Part of the appeal to such an idea is that it can boost federal revenue with limited impact on the charitable sector. Some estimates have indicated that the nonprofit sector would lose about $4 billion annually. While in Washington budget debates a $4 billion reduction might seem “marginal,” in the charitable sector it will likely have a devastating impact — especially on small community and social welfare institutions.

Another mistaken perspective with this proposal is that across-the-board tax reform would naturally lead to greater charitable giving. One Senate staffer was quoted as saying “Good tax reform would stimulate economic growth, increase incomes and encourage charitable giving, which is the best result for nonprofits.” While it is true that tax reform overall may lead to charitable giving by some, reducing this deduction would certainly discourage giving by others — especially with more to give.

It is a mistake to create budgetary fixes at the expense of the nonprofit community — especially when we will still be dealing with the aftershocks on the great recession long after the economy is touted as “recovered.”

Washington, D.C.

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