Senators seek data on tax law's impact on charitable giving

Senators seek data on tax law's impact on charitable giving
© Anna Moneymaker

A bipartisan pair of senators is asking Treasury Secretary Steven MnuchinSteven Terner MnuchinOvernight Defense: Iran tensions swirl as officials prepare to brief Congress | Trump threatens war would be 'end of Iran' | Graham tells Trump to 'stand firm' | Budget talks begin This week: Democrats, White House set for infrastructure, budget talks White House encouraging investment in Middle East as part of peace plan MORE for data about charitable deductions and giving, expressing concerns that the Republican-led tax law passed in December may lead to a decline in taxpayers donating to nonprofits.

"We remain concerned and seek additional information on the potentially alarming decrease in charitable giving in the United States following significant changes to the tax code made by the Tax Cuts and Jobs Act," Sens. James LankfordJames Paul LankfordBipartisan group of senators introduce legislation designed to strengthen cybersecurity of voting systems Dems push to revive Congress' tech office US-China trade talks end without announcement of deal MORE (R-Okla.) and Christopher CoonsChristopher (Chris) Andrew CoonsMnuchin says carbon capture tax credit guidance will be out soon Mnuchin signals administration won't comply with subpoena for Trump tax returns Menendez, Rubio lead Senate effort to regulate Venezuelan sanctions MORE (D-Del.) wrote in a letter to Mnuchin dated Friday.

Lankford and Coons are the chairman and ranking member, respectively, of the Senate Appropriations Subcommittee on Financial Services and General Government.

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The senators previously brought up their concerns about a potential drop in charitable giving during a hearing with Mnuchin in May. Mnuchin replied that he thinks the tax law will encourage more charitable giving, but said he would look at the issue if a decline ends up occurring. 

Under the new tax law, which President TrumpDonald John TrumpWhat the Mueller report tells us about Putin, Russia and Trump's election Fox's Brit Hume fires back at Trump's criticism of the channel Anti-US trade war song going viral in China MORE signed in December, fewer people are expected to claim the deduction for charitable giving. The law significantly increases the size of the standard deduction, which could push more taxpayers to take the standard deduction instead of taking itemized deductions like those used for charitable donations.

Lankford and Coons noted in their letter they are worried that the decline in the incentive for taxpayers to itemize deductions will also lead to a decline in donations to charities. They cited studies from the Tax Policy Center and the American Enterprise Institute predicting a slight decrease in giving because of the tax changes.

"Despite our disagreements on other tax-related issues, we believe that our tax code should support American charities and the generosity of millions of Americans who donate to charities," the senators wrote.

They added that the charitable sector is an important part of the economy, and a decline in giving could hurt the sector's capabilities and its employees.

The senators asked Mnuchin to provide them with information about claimed charitable deductions and projections for charitable giving in 2018. They also want the Trump administration to provide quarterly data on the number of deductions claimed, the average size of donations and comparisons of this data to figures from the past 10 years.

"If those projections are lower than previous years, or any concerning trends relating to charitable giving are identified, we look forward to working together to address these issues immediately," the senators wrote.

Lankford last year introduced a bill that would create a charitable deduction that people could take even if they don't itemize their deductions. A version of the bill has also been offered in the House by Rep. Mark WalkerBradley (Mark) Mark WalkerNCAA to consider allowing student athletes to profit off their name, image and likeness Members spar over sexual harassment training deadline Colorado state senators plan to introduce bill to let NCAA athletes get paid MORE (R-N.C.).