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Charitable Deduction Resource Center

PPPs Position:
The federal government must continue to support philanthropy. Tax incentives for charitable giving, such as the charitable deduction, send an essential message about the value our society places on voluntary giving and the important role of charitable organizations in meeting critical individual and community needs. The true beneficiaries of the charitable donation are not the generous Americans who make charitable gifts, but all citizens whose local communities, nation, and world are made better through the work of charitable organizations.

Americans do not make charitable gifts for tax reasons, but tax incentives encourage more giving and make bigger gifts possible. Tax incentives for charitable giving send a message that helping others is a core value to be encouraged. The charitable deduction is not a matter of providing a reward or something of value to the taxpayer; rather it is a matter of encouraging those with financial means to use their wealth to help those without. This voluntary redistribution of wealth is a cornerstone of Americas philanthropic heritage.

Take Action:
PPP urges Congress to reject any proposals that would eliminate or limit the value of the charitable deduction. Take action now by contacting your Members of Congress, and make sure they do all they can to protect the charitable deduction.

Start by identifying your two Senators and one Representative. To download a letter that you can customize, click here. To contact them by phone, use their direct numbers or call the Congressional switchboard at 202-224-3121 and ask to speak to your elected officials. Please use the following talking points:
  • I strongly urge you to oppose any proposal that would eliminate or limit the value of the charitable deduction. The Administrations proposal to cap itemized deductions at 28 percent for higher income taxpayers, for example, would have long-lasting negative consequences on charitable organizations that millions of Americans rely on for vital programs and services.
  • It is estimated that this proposed cap on itemized deductions could cost charities as much as $7 billion per year in charitable contributions.
  • Americans strongly support the charitable deduction. In an April 2011 Gallup poll, 71 percent opposed eliminating the charitable deduction to lower the overall income tax rate, and 68 percent opposed eliminating the charitable deduction to reduce the federal budget deficit. More people supported the charitable deduction than other popular deductions like the home mortgage interest deduction or state and local tax deduction.
  • The difficult economy has had a significant impact upon Americas charitable community. According to the IRS, Americans claimed deductions for $172.9 billion in charitable contributions in 2008, a 10.6 percent drop from 2007. More recent IRS estimates project that Americans only claimed $148.6 billion in charitable contributions in 2009, an additional 14 percent drop. It is also worth noting that the IRS data indicates that high income taxpayers (those earning more than $200,000) contributed $49.6 billion to charities in 2009.
  • When the economy stagnates, nonprofit organizations and their services are needed the most. Charitable organizations bridge the gap by serving our communities and those in need when budgetary constraints hinder state and federal governments from providing similar services.
  • Not only does reducing charitable giving harm the nonprofit sector, but it also hurts the people typically the poor who rely upon these services. Despite arguments to the contrary, wealthy Americans will not bear the brunt of any elimination or limitation of the charitable deduction, but Americas poor will.
  • Studies indicate that donors give for many reasons incentives such as tax deductions being among them. While Americans do not make charitable gifts only for tax reasons, tax incentives make more and larger gifts possible.
  • Recent history and the actions of the federal government reveal that tax incentives do, in fact, affect charitable giving. During times of crisis, such as the natural disasters like Hurricane Katrina, the 2008 Midwest flooding and the 2010 Haiti earthquake, Congress regularly passes charitable giving incentives to make it easier for Americans to give donations and other support to nonprofits serving individuals, families and communities in need. Those incentives resulted in increased levels of resources to those charities caring for the victims.
  • For the sake of the economy and Americas disadvantaged, we need to encourage all individuals, regardless of income and wealth, to give more to charitable organizations. Eliminating or limiting the value of the charitable deduction does the exact opposite and would fundamentally change a tax structure that has contributed to a cherished tradition of charitable giving that is unmatched the world over.
  • Again, I urge you to oppose any proposal that would eliminate or limit the value of itemized deductions for charitable contributions.

Additional Information:
Please visit the following links to get more information about proposed changes to the charitable deduction.

For more information on the effect of the "Pease Limitation":

Additional Links:

 

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