The U.S. Congressional Budget Office has released a paper that examines various proposals for charitable giving tax deductions. Specifically, the CBO looked at 11 options for altering the current income tax treatment of charitable giving, which can be grouped into four categories:
- Retaining the current deduction for itemizers but adding a floor.
- Allowing all taxpayers to claim the deduction, with or without a floor.
- Replacing the deduction with a nonrefundable credit for all taxpayers, equal to 25 percent of a taxpayer’s charitable donations, with or without a floor.
- Replacing the deduction with a nonrefundable credit for all taxpayers, equal to 15 percent of a taxpayer’s charitable donations, with or without a floor.
You can download a PDF of a summary of the report here: Summary of CBO Tax Deduction Report.
You can download a PDF of the complete report here: CBO Report on Charitable Deduction Options.
You can read the article “Study Shows How Changes to the Tax Code Could Affect Giving,” from the May 31 issue of The Chronicle of Philanthropy, by clicking here.
As you review the report, you will see that the CBO has found that tax policy can have an impact on charitable giving. However, readers should remember that the greatest influencer of charitable giving is Gross Domestic Product. Giving has been consistently about two percent of GDP since records have been kept. Any government policy that encourages growth in GDP will lead to growth in charitable giving. Any government policy that slows GDP growth or causes a drop will also impact charitable giving in like fashion.
[This has been a Special Report. From time to time, I will provide Special Reports on important and/or breaking news items. My regular weekly post will appear tomorrow.]
That’s what Michael Rosen Says… What do you say?
Michael Rosen Says... 