Universal Charitable Deduction Bills Introduced in Congress

A number of bills have been introduced in Congress that would allow all taxpayers to take a charitable deduction, even if they didn’t itemize their taxes.

The Charitable Giving Tax Deduction Act was introduced by Rep. Chris Smith (R-N.J.) and co-sponsored by Rep. Henry Cuellar (D-Texas).

The bill creates a universal charitable tax deduction, which AFP has been advocating in Congress to offset potential losses resulting from tax reform changes. The Act does not limit the amount of charitable donations that could be claimed through this deduction. This provision would enhance giving by simplifying the tax code and creating fairness, allowing anyone to take a charitable deduction, including those who take the standard deduction.

Rep. Mark Walker (R-NC) and Sen. Mark Lankford (R-OK) have also introduced legislation that would provide taxpayers who do not itemize their tax returns a deduction for charitable contributions of up to one-third of the amount of the standard deduction.

Separate research conducted by Independent Sector and the Lilly Family School of Philanthropy at Indiana University, as well as by the Tax Policy Center and the American Enterprise Institute, estimated that annual charitable giving could fall by as much as $13 - $20 billion because of the doubling of the standard deduction in the new tax law.

However, the same research found that enacting a universal charitable deduction (in conjunction with the new tax law) would lead to an increase in giving of approximately $5 billion every year.

“We’re thankful for the work of Representatives Smith, Cuellar, and Sanford, as well as Sen. Lankford, in introducing these important bills,” said Mike Geiger, MBA, CPA, president and CEO of AFP. “The new tax law will likely change giving in a variety of ways, both positive and negative, so we believe a universal charitable deduction will be helpful in encouraging all Americans to give—and give more—to causes in their community and around the world.”

The AFP U.S. Government Relations Committee will be reviewing these bills and determining how AFP will support the universal charitable deduction and move it forward through Congress before the federal elections in November later this year.