Nonprofit Groups Say GOP Tax Bill Would Discourage Giving

Nov 3, 2017
Originally published on November 3, 2017 2:41 pm
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House Republicans say their new tax bill will grow the economy, create jobs and simplify taxes. One way they hope to do that is by eliminating some tax deductions. The one for charitable contributions is not on the table. Still, nonprofit groups say the bill would discourage giving. And they are ready to fight, as NPR's Pam Fessler reports.

PAM FESSLER, BYLINE: When House Majority Whip Steve Scalise spoke in favor of the new GOP tax bill yesterday, he held up a small card.

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STEVE SCALISE: Over 90 percent of Americans will be able to fill out their taxes on a postcard. That's what simplicity means.

FESSLER: But that simplicity comes with a price, say charities and other nonprofits, even though Republicans promise to preserve the deduction for charitable giving.

STEVE TAYLOR: Turns out that's just a talking point, and it's really pretty misleading.

FESSLER: Steve Taylor, a senior vice president at United Way Worldwide - he notes that now about a third of taxpayers itemize their deductions, including for charitable donations.

TAYLOR: Under this new proposal, only about 5 percent of people will itemize their taxes. What that means is effectively millions of Americans that currently claim the charitable deduction will lose it.

FESSLER: That's because the Republican plan would double the standard deduction that taxpayers get in lieu of itemizing - good for taxpayers maybe but bad for charities. Una Osili is with the Philanthropy School at Indiana University. She says the proposed changes could...

UNA OSILI: Reduce charitable giving by up to $13 billion a year. And that translates to a significant amount.

FESSLER: Especially for smaller nonprofits like churches and community groups that rely on donations from lower- and middle-income taxpayers. She says it's not that people will stop giving. They just won't give as much. Tim Delaney, who heads the national council of nonprofits, says this is especially worrisome because Congress is trying at the same time to cut domestic spending.

TIM DELANEY: That will lead to more people having more needs. And we're just concerned that this is going to overwhelm the nonprofit community.

FESSLER: So that community is pushing Republicans to include something else in their tax plan. It's called a universal charitable deduction, which taxpayers would get on top of the standard deduction. It could cost the Treasury several billions of dollars a year. But the plan has won some crucial Republican support. Steve Taylor of United Way says other lawmakers will be hearing a lot more about it soon.

TAYLOR: There's 1,150 United Ways in the United States. That means there's at least one United Way in every single congressional district. And so over the next couple of days and into next week, those United Ways are going to be reaching out to their members of Congress.

FESSLER: As will tens of thousands of other nonprofits around the country. Still, Taylor admits they'll be competing with lots of other interests fighting to protect tax breaks important to them. Pam Fessler, NPR News, Washington.

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