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Tax Plan Likely to Reduce Donations to Charities, Washington Post Says

Tax Plan Likely to Reduce Donations to Charities, Washington Post Says

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By    |   Friday, 15 December 2017 11:29 AM

The new tax plan is likely to reduce donations to churches and charities, The Washington Post said in an analysis published Friday.

Early versions of the tax bill in Congress seek to decrease tax incentives on contributions to non-profit organizations, which could ultimately hurt charitable giving.

According to a report by The Washington Post, the standard deduction could be doubled under the House and Senate tax plans from $12,700 for married couples filing jointly to $24,000.

With the first $24,000 of household income from taxes shielded, there could be a notable drop in the number of families itemizing deductions for breaks on things such as charitable donations.

Based on predictions by the Joint Committee on Taxation, the number of taxpayers deducting charitable contributions from their tax bills could fall from 40.7 million to 9.4 million should the House bill become law, The Financial Times noted.

Una Osili, professor of economics and associate dean for research and international programs at the Indiana University Lilly Family School of Philanthropy, said per The Washington Post that the new tax plan would see 30 million households within the $50,000 to $100,000 earning bracket refrain from itemizing deductions on their taxes.

Currently about a third of taxpayers itemize their deductions, said Steve Taylor, senior vice president and counsel for public policy at United Way Worldwide, according to National Public Radio.

However, under the new proposal, only about 5 percent of people will itemize their taxes.

"What that means is effectively millions of Americans that currently claim the charitable deduction will lose it," said Taylor.

The shift in incentives hits middle-income Americans the hardest, and the charities they support will suffer the most.

"They tend to support local charities, congregations and basic needs organizations," said Osili, per The Washington Post.

The National Christian Foundation’s president emeritus, David Wills said nobody should have their charitable giving taxed.

"If it gets to the point where only the top 5 percent can get a deduction for their giving, that makes it really easy in the future to eliminate the charitable income deduction entirely," he said in a news release.

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The new tax plan is likely to reduce donations to churches and charities, The Washington Post said in an analysis published Friday.
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2017-29-15
Friday, 15 December 2017 11:29 AM
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