The current tax deduction for charitable giving is under attack, and the services provided by churches and other institutions could suffer, U.S. senators were warned Oct. 18.
“Tax reform options being discussed today are options that target charitable giving concocted by those who, hungry for more tax dollars to finance reckless government spending, are now casting their sights on the already depleted resources of charities and churches,” Sen. Orrin Hatch, R.-Utah, said at a hearing by the Senate Finance Committee.
The committee heard testimony on a proposal by President Obama that would ultimately limit charitable deduction. A prominent research organization has estimated the projected 28 percent cap on itemized deductions could cause a $6 billion drop in charitable giving, Hatch said. Some witnesses expressed their fear that non-profits, charities and churches will suffer during this time of economic crisis if the incentive to give money is suppressed.
Sen. Max Baucus, D.-Mont., the committee’s chairman, noted one-third of taxpayers itemized deductions last year. Of those, 86 percent claimed charitable deductions.
Higher income families tend to donate to medical facilities, while lower income families contribute often to religious establishments and basic needs charities, Baucus said in his opening statement. Hatch said an alteration in the current tax code could cause donations to decrease and significantly damage the non-profits’ ability to continue serving the community.
Source: Baptist Press | Holly Naylor