Alliance Meets with Rep. Roskam on Charitable Tax Deduction
The Alliance, in partnership with Leadership 18, met with Rep. Peter Roskam (R-Ill.) last week to discuss protecting the charitable tax deduction. Rep. Roskam is a member of the Ways and Means Committee and specifically sits on the Tax Policy Subcommittee, which has jurisdiction over the matter of charitable tax deductions. The Alliance sought to not only protect the charitable deduction but also to educate about the unintended consequences of tripling the standard deduction, as proposed both by the House Republican Blueprint and President Trump’s tax plan. Raising the standard deduction would vastly increase the number of taxpayers who use that option and will, in turn, decrease the number of taxpayers who itemize—from about 30 percent to five percent. The charitable deduction is only available to those who itemize and will likely not be an option for 95 percent of taxpayers who are expected to take the standard deduction. The Trump plan also places a hard cap on itemized deductions ($100,000 on the individual and $200,000 on joint filing couples).
The nonpartisan Tax Policy Center estimates that this change would reduce giving anywhere between 4.5-9 percent. The American Enterprise Institute estimates the Trump plan could eliminate more than $17 billion in annual giving.
Rep. Roskam’s office seemed very eager to further discuss these kinds of implications on the charitable sector, as the intention is not to take away money from the important services we provide. They went so far as to offer Alliance members a seat at the table. They also mentioned the possibility of a tax reform day during the upcoming spring recess in Chicago, Illinois. As details are finalized, the Alliance will alert members in Illinois and surrounding states about how to get involved.
Charitable Giving Coalition
Urban-Brookings Tax Policy Center
American Enterprise Institute