The art of deduction
December 26, 2012
The monumental effort to reduce the federal deficit and avert the year-end “fiscal cliff” is going to demand a series of sacrifices and compromises on the part of perhaps all Americans. But one idea for generating revenue should be a non-starter: lowering the maximum amount taxpayers can deduct from their taxes for charitable gifts.
The charitable deduction has been an essential component in raising funds for nonprofits — including Jewish nonprofits, which often provide vital alternatives to direct government programs. Nonprofits also account for 5 percent of the GDP, 9 percent of the economy’s wages, and nearly 10 percent of the nation’s jobs. Reducing supports for this crucial sector would undermine the very intention of the current budget talks.
Nonprofits across the ideological and religious spectrum are as one in their calls to protect the charitable deduction. “Tax policy should encourage charitable giving, especially during times of economic distress,” said William Daroff, vice president for public policy of the Jewish Federations of North America. “As demands on nonprofits continue to grow, we must ensure that the tax code continues to promote giving and enables charities to meet the rising demand for critical community-based services.”
Their efforts appear to be paying off: Last week, the Chronicle of Philanthropy reports, the president “appeared to single out the charitable deduction for a more-generous write-off by the wealthy than mortgage interest, state taxes, or other tax breaks.”
That’s a relief, but nothing’s set in stone. To help keep the heat on, go to tinyurl.com/d7zat6g and join local efforts to protect the tax deduction.