Trump tax law made Amer­i­cans less char­i­ta­ble

Lodi News-Sentinel - - NATION/WORLD - By Laura Dav­i­son

WASH­ING­TON — Amer­i­cans gave less money to char­i­ties last year partly be­cause the Repub­li­can tax law changes made many peo­ple in­el­i­gi­ble for tax breaks that can inspire do­na­tions.

Giv­ing by in­di­vid­u­als fell an es­ti­mated 3.4%, af­ter ad­just­ing for in­fla­tion, last year, ac­cord­ing to a re­port re­leased Tues­day by Giv­ing USA. The num­bers re­flect the first year of the 2017 tax over­haul that ex­panded the stan­dard de­duc­tion, a sim­pler way of fil­ing taxes, but also ex­cluded mil­lions of tax­pay­ers from claim­ing a tax break for do­nat­ing to char­ity.

To­tal es­ti­mated giv­ing, by cor­po­ra­tions, foun­da­tions, as well as in­di­vid­u­als, fell about 1.7%, af­ter in­fla­tion, to $427.7 bil­lion. In­di­vid­u­als ac­count for more than twothirds of all char­i­ta­ble giv­ing. In­creases in do­na­tions from cor­po­ra­tions and foun­da­tions helped off­set some of the losses from in­di­vid­u­als.

“The en­vi­ron­ment for giv­ing in 2018 was far more com­plex than most years, with shifts in tax pol­icy and the volatil­ity of the stock mar­ket,” Rick Dun­ham, chair of Giv­ing USA Foun­da­tion, said in a press re­lease. The re­port is based on data pro­vided by donors, fund-rais­ers and non-prof­its.

The 2017 tax law nearly dou­bled the stan­dard de­duc­tion to $24,000 for a cou­ple. That change meant it was more ad­van­ta­geous for mil­lions of tax­pay­ers to file us­ing the lump sum de­duc­tion, rather than tal­ly­ing up all their tax breaks from mort­gage in­ter­est pay­ments, state and lo­cal taxes and char­i­ta­ble gifts.

Only about 18 mil­lion tax­pay­ers item­ized in 2018 down from 46.5 mil­lion the year be­fore, ac­cord­ing to es­ti­mates from the non­par­ti­san Joint Com­mit­tee on Tax­a­tion. About 88% of fil­ers last year took the stan­dard de­duc­tion, which means they couldn't write off their do­na­tions.

“With many donors ex­pe­ri­enc­ing new cir­cum­stances for their giv­ing, it may be some time be­fore the phil­an­thropic sec­tor can more fully un­der­stand how donor be­hav­ior changed in re­sponse to these forces and tim­ing,” Amir Pa­sic, the Dean of the Lilly Fam­ily School of Phi­lan­thropy at In­di­ana Univer­sity, said in a re­lease.

Some non­prof­its pre­dicted that con­tri­bu­tions could de­crease sub­stan­tially fol­low­ing the tax law changes, but the most re­cent data don't show the most dire es­ti­mates com­ing to fruition.

Repub­li­cans and Democrats have both con­tem­plated mak­ing the char­i­ta­ble con­tri­bu­tion de­duc­tion an “above the line” tax break, mean­ing that tax­pay­ers can claim it re­gard­less of whether they item­ize or not. Such a change, how­ever, is un­likely to pass in the near fu­ture. That change could cost as much as $515 bil­lion over a decade, ac­cord­ing to es­ti­mates from the Tax Foun­da­tion.

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