NCPA - National Center for Policy Analysis

Charities Would Benefit From Bush's Tax Proposal

January 31, 2001

President Bush's proposal to allow taxpayers who do not itemize their returns to deduct charitable contributions could bring an additional $14.6 billion a year to charitable organizations, according to a study by PricewaterhouseCoopers. The study was commissioned by the group Independent Sector, a coalition of nonprofit groups and corporate philanthropy programs.

Here are some other findings:

  • The additional $14.6 billion represents an 11 percent increase over current giving -- increasing the pool of donors by 11 million.
  • The Bush proposal would allow more than 80 million taxpayers who do not itemize to deduct their charitable contributions up to a ceiling equal to the standard deduction.
  • According to the report, 70.7 million Americans contributed $130.3 billion to charities last year, and 39.5 million itemized their tax deductions.
  • Under the Bush proposal, 82.4 million would contribute $144.9 billion.

Fewer than one-third of all Americans itemize their deductions.

The Joint Congressional Committee on Taxation had already estimated that the plan would reduce federal revenues by about $75 billion over 10 years.

A separate Bush initiative -- phasing out the estate tax -- would likely mean a loss of income for nonprofits. An Independent Sector official acknowledged that a trade-off might be involved, but said her group doesn't like to think of it that way.

Source: Tamar Lewin, "Report Sees Vast Benefit for Charities in a Bush Tax Proposal," New York Times, January 31, 2001.


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