Charities fear GOP tax plan could lead to loss of billions of dollars in donations

Wednesday, 15 November 2017, 06:32:21 AM. The Republican tax plan could cost charities billions by nearly doubling the standard deduction, eliminating itemized deductions and an incentive to donate for 95 percent of taxpayers.
Charities in the Chicago area and across the country are bracing for the potential loss of billions of dollars in annual contributions as a result of a tax overhaul plan from congressional that would eliminate the incentive to donate for nearly all Americans. The proposed House bill, pitched as the “Cut Cut Cut Act” by President but officially named the Tax Cuts and Jobs Act, includes a provision that would nearly double the standard deduction to $12,200 for an individual and $24,400 for a married couple. Raising the standard deduction would reduce the number of taxpayers who itemize deductions — including charitable donations — from the current 30 percent to 5 percent, experts say. Combined with a decrease in the top marginal tax rate, the disincentive to itemize would reduce charitable giving by $4.9 billion to $13.1 billion annually, according to a May study by the Lilly Family School of Philanthropy at Indiana University. In Illinois, where a two-year budget impasse stripped much-needed state funding from many charitable organizations, the impact of reduced individual giving may be even more devastating. “Many of these groups that were hard-hit that didn’t receive funding — many of them still haven’t received funding,” said Anita Banerji, director of public policy for Forefront, a statewide membership association for nonprofits and foundations. Forefront is gearing up for #ILGive on Nov. 28, an annual online fundraiser it sponsors to boost hundreds of Illinois charities....Read more
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