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Government Relations
Legislative Bulletin
December 2,
2010
PPP Opposes NCFRR Proposal Regarding Charitable Giving
The chairmen of President Obama's deficit commission, the National Commission
on Fiscal Responsibility and Reform, have released their
new plan, which
proposes eliminating the charitable deduction and replacing it with a 12
percent non-refundable tax credit. This credit would only be available for
amounts beyond two percent of a taxpayer's adjusted gross income. The
Partnership for Philanthropic Planning (PPP) applauds efforts to address the
budget deficit and national debt. However, PPP strongly opposes the
Commission’s characterization of incentives for charitable giving as “tax
expenditures.” The charitable deduction is unlike other deductions, in which
the transaction results in some tangible benefit to the taxpayer. The
charitable tax deduction may encourage a donor to increase the size or
accelerate the timing of a charitable gift, but donors cannot make money by
giving it away. Tax incentives for charitable giving are a way to encourage
responsibility and personal involvement in the future of our society. The true
beneficiaries of the charitable deduction are the poor, the needy, and all of
those who benefit from the services provided by charitable organizations.
The recommendation of the NCFRR to create a charitable tax credit would
actually eliminate any tax incentive for those who cannot afford to give more
than 2% of adjusted gross income and may seriously reduce incentives for
high-net worth donors who historically provide the most generous support to
nonprofit causes. PPP has long held that rather than the imperfect mechanisms
of deduction or credit, charitable gifts should be accorded a dollar for dollar
exclusion from income. Far from the “tax expenditure” that the Commission
suggests, allowing charitable contributions as adjustments to income would
provide a fair and accessible incentive for charitable giving to all Americans.
Read more about PPP’s proposal. |
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