For 100 years, federal tax policy has incentivized the giving spirit. It has also empowered our crucial work. The goal of simplifying the tax code and making it easier for Americans to file their taxes is admirable, but the collateral damage this simplification would cause comes at too great a cost.
According to Republican estimates, nearly doubling the standard deduction would result in only five percent of taxpayers itemizing their tax deductions — placing the charitable deduction out of the reach of 95 percent of taxpayers. Currently, there are $241 billion worth of donations being written off by individual taxpayers and that would drop to $146.3 billion as a result of the legislation, according to Joint Committee on Taxation (JCT). Under current law, the JCT predicts that next year, 40.7 million taxpayers would deduct charitable contributions from their tax bills.
A decrease in giving of this scale would force charitable nonprofits to make significant cuts to their operations—millions of people will no longer have access to the services that nonprofits are currently able to offer. Economists also estimate a loss of 220,000 to 264,000 jobs in the nonprofit sector as a result of the cuts that will be necessary for many charities to keep their doors open. A bill that is designed to create jobs shouldn’t be taking away the jobs of almost a quarter of a million Americans who are trying to help others.