Analysis: GOP tax bill could reduce charitable giving by up to $24 billion
The House version of the GOP tax bill could cause a reduction in charitable giving of between $12 billion and $20 billion in 2018, according to a new analysis from the Tax Policy Center.
Although the bill does not cut the deduction per se, the nonpartisan group estimates that provisions to nearly double the standard deduction while scaling back itemized deductions would cause the number of taxpayers who claim charitable deductions to plummet to fewer than 13 million next year, down from 46 million in 2017.
“[The Tax Policy Center] estimates the House bill would significantly reduce the tax incentive to donate, increasing the after-tax price of giving by about 8 percent,” the center writes in its analysis.
One major blow to charities in the bill is GOP’s repeal of the estate tax, which the Tax Policy Center estimates could “reduce charitable bequests by between 15 and 30 percent (roughly $4 billion).”
Recent poll numbers suggest that a majority of Americans surveyed oppose the GOP’s tax plan, including strong opposition (75 percent) to plans to remove state and local tax deductions.
Republicans in Congress and the White House hope to send their tax bill to President Trump’s desk before lawmakers leave Capitol Hill for the year.
The House’s version of the bill passed last week by a vote of 227-205. Democrats uniformly opposed the bill, while 13 Republicans broke ranks to vote against it.
“Passing this bill is the single biggest thing we can do to grow the economy, to restore opportunity and help these middle-income families who are struggling,” House Speaker Paul Ryan (R-Wis.) said last week.
Senate Republicans hope to vote on their tax plan in the week after the Thanksgiving holiday.
If the Senate passes its version of the bill, Congress will move into a conference negotiation between the two chambers over the final legislation.
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