A hearing this week on the President’s proposed FY2015 Budget featuring U.S. Treasury Secretary Jack Lew turned to the importance of incentivizing charitable giving through the federal tax code. A champion of the charitable deduction, U.S. Senator John Thune (R-SD), questioned Secretary Lew about why the Administration continues to include in its budget the idea of limiting the value of that deduction for high income donors. Specifically, the White House would cap the value of itemized deductions at the 28 percent tax rate, which would result in those donors in the 33, 35, and 39.6 percent income tax brackets being taxed more on the money they give away to charitable causes. Secretary Lew affirmed the importance of charitable giving, but did not think this alteration would hurt giving. Senator Thune countered that while people will likely still give to important causes, they may not be able to give as much.
NRB has expressed a view similar to Senator Thune: “The charitable deduction is a century-old proven success. Diminishing its value would essentially commandeer voluntary donation money away from important ministries and into federal coffers, ultimately to the detriment of the communities those ministries serve.”
Notably, Senator Thune and Senate Finance Committee Chairman Ron Wyden (D-OR) have rallied nearly a third of U.S. Senators to publicly affirm their strong support for the charitable tax deduction.
By Aaron Mercer, Vice President of Government Relations
Published: March 7, 2014