As Congress considers tax reform, we must understand how the current proposals threaten the future of charitable giving and that there is another path.

I share my perspective as the chair of the American Red Cross Central and Mid Coast Maine Chapter Board of Directors. I see every day what our organization accomplishes through the dedication of our volunteers and the generosity of our donors. We rely on the financial support of the American public – not the federal government as many assume.

The Red Cross depends on these financial gifts from the public to respond to disasters, both large and small; supply much-needed blood; care for veterans, military members and their families; teach lifesaving skills like CPR; make people safer with free smoke alarms and fire education.

Both tax reform bills remove the incentive for charitable giving by doubling the standard deduction. That change is expected to reduce the number of taxpayers who itemize to 5 percent from the current 30 percent.

According to the Joint Committee on Taxation, the House version, if enacted as it now stands, would lead to a $95 billion reduction in in the amount of charitable gifts deducted by taxpayers. The committee estimates that 9.4 million taxpayers who itemize will deduct charitable contributions totaling $146.3 billion rather than the expected 40.7 million itemizing taxpayers deducting charitable contributions of $241.1 billion under current law.

That’s the wrong direction for tax policy.

The fair solution is a universal charitable tax deduction. The Indiana University Lilly Family School of Philanthropy found that such a measure applied to all charitable giving could produce a net gain in total giving of up to $4.8 billion annually.

Rather than discouraging philanthropy, tax reform should encourage it by more people, regardless of income level or whether they itemize.

Rose Murphy, Brunswick

Board Chair, Central and Mid Coast Maine

Chapter of the American Red Cross

Copy the Story Link

Comments are not available on this story.