Proposed Charitable Contribution Reductions Strongly Rejected by Congress
Recently, we provided you with educational information regarding an issue under consideration by Congress. Under a new Obama administration proposal, the value of itemized deductions for charitable contributions by the wealthy would have been reduced, purportedly for the purpose of paying for new healthcare initiatives.
Last week, after much public attention on this matter, both Houses of Congress resoundingly rejected this proposal. While approving most of the Obama administration’s new budget requests, this particular proposal was unanimously rejected by the Senate and also overwhelmingly rejected by the House of Representatives.
In addition to the rejection of this proposal, the Senate is considering two amendments which either prohibit changing current tax laws for charitable contribution tax deductions or which insure that charitable organizations are not negatively impacted by federal income tax changes for charitable donations. Obviously, nonprofit representatives have lauded this congressional action, even though the final resolution of the proposed amendments will not be known for several weeks.
Some experts had estimated that the proposal possibly would have led to a decrease of $4-9 billion in charitable giving, even though the proposed reductions affected only tax payers in the highest tax brackets. Researchers comment that many nonprofits are dealing with a drop in charitable donations because of the troubled economy at this time, and that any negative impact upon charitable giving would affect all nonprofits.
We will attempt to keep you advised as to any further developments regarding this public issue.
Dennis Watkins is Legal Counsel for the Church of God International Offices in Cleveland, Tennessee.
