The Charitable Tax Deduction
Eliminating or reducing America’s 100 year old incentive that encourages giving would have devastating consequences for our communities and the millions of people who depend on vital services supported through charitable giving.
Even though tough decisions must be made to address fiscal challenges and reform our tax system, the charitable tax deduction must be preserved.
It has proven to be extremely effective at encouraging the private sector to serve the public good. It enhances the ability of both individuals and businesses to help those in need, as well as to fund institutions that are the foundation of our civil society.
According to Giving USA, in 2012, Americans donated more than $300 billion to support charitable causes, with itemized giving comprising more than 80%.
Fueled by the deduction, charitable giving creates a vibrant and economically vital charitable sector. Nonprofits generate $1.1 trillion annually in jobs and services. One in ten U.S. workers or 13.7 million jobs are in the nonprofit sector.
Employees of nonprofit organizations earn 9% percent of all wages paid in the U.S.,--$587.7 billion.
For every $1 a donor can deduct for their donation, the public receives approximately $3 of benefit. What other tax provision generates that kind of positive public impact?
Without private support, government (taxpayers) will be called upon to support programs maintained by America’s charities.
Studies show that cutting back the charitable deduction would harm our communities, hitting those who need support the most.
The charitable deduction works. It is different than other itemized deductions because it encourages individuals to give back a portion of their income to their communities.
It’s not about the donors.
Studies show that cutting back the charitable deduction would harm our communities, hitting those who need help the most. Without private contributions, government (taxpayers) will be called upon to maintain and manage programs currently supported by America’s charities.
Aren’t we better off leaving this to the experts? The conversation should not be about penalizing the donors-moreover, it should be about what their dollars are doing to aid those in need.
Since 1917, our tax code has recognized the value of the charitable deduction. Charitable donations benefit the people and communities that are served providing critical support to our communities and the most vulnerable.
By allowing those who give so generously to claim a deduction at the same rate at which taxes are paid, our tax policy has ensured that such gifts are not subject to additional tax. One cannot be taxed on money they do not have, and on income they do not retain.
A recent United Way Worldwide survey found that nearly 80 percent of Americans believe that reducing or eliminating the charitable tax deduction would have a negative impact on charities and the people they serve.
According to a January 2013 national survey, 75 percent of Americans say they value the deduction as it currently stands.
Sixty-one percent say that they feel strongly about maintaining the current deduction, up from 56 percent in January 2012.
Now is the time to express to our elected officials the importance of the charitable deduction. Our community depends on it. The underserved populations we support depend on it, the fiscal strength of our nonprofit community depends on it.
We must maintain the current charitable deduction and this powerful giving incentive and strong American tradition.