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.
Browse more articles on Tax and Spending Issues