Nonprofits are gearing up to fight President Obama’s plan to pay for his jobs bill in part by limiting charitable deductions. Mr. Obama wants to limit the amount all wealthy people can write off for charitable gifts as well as housing, medical expenses, and other items.
Nonprofit leaders say that a curb on deductions will stifle giving and that charity write-offs make up only a small percentage of the money the federal treasury loses in deductions by the wealthy.
In 2009, 46.4 million taxpayers claimed the itemized deduction, with the deduction for charitable donations totaling an estimated $158-billion, according to the Internal Revenue Service. That total accounts for 13 percent of all of the itemized deductions claimed that year. By comparison, taxpayers claimed an estimated $442-billion in deductions for mortgage interest and $432 billion for state and local taxes and real-estate taxes. (See document below)
“We feel strongly that the charitable deduction is different from all other deductions and it shouldn’t be on the table,” said Andrew Schulz, vice president for legal and government relations at the Council on Foundations, in Arlington, Va. “We haven’t personally gone to anyone to say would you sponsor something, but we’ll be thinking about it.”
Some nonprofit leaders have already started lobbying against the president’s proposal. About 60 members of the Jewish Federations of North America spent Tuesday on Capitol Hill, speaking to 30 Democrat and 10 Republican lawmakers.
“Of the members of Congress we spoke to, none said they were supportive of reducing the tax deduction for charitable contributions, particularly among liberal Democrats, who understand in these economic times how important social-service agencies are,” said William C. Daroff, a vice president of the organization.