Bush Nixes Non-Itemizer Despite New Study About Its Impact
(March 14, 2005) The Bush Administration has indicated it will no longer push for passage of the non-itemizer deduction, even as a new study shows the provision would increase giving for the United Way of America (UWA) and other organizations.
Bush's new budget proposal does not contain any mention of the non-itemizer deduction, a proposal which has been featured prominently in past budget materials. The deduction was estimated to have cost $85 billion over ten years.
Under the proposal, donors could receive a deduction for annual aggregate contributions over a certain amount: $250 for individual filers and $500 for joint fillers. The maximum deduction donors could take would be $250 for an individual and $500 for joint filers.
Opposition from Congress
While the Bush Administration had emphasized the non-itemizer deduction in the past, both the Senate and the House of Representatives were, in general, never especially receptive to the idea. During its lobbying efforts over the past several, AFP often heard many questions and much skepticism about the idea from Congressional offices, such as whether the deduction was good tax policy and if it would actually lead to an increase in contributions.
'Many members of Congress have been troubled that some unscrupulous individuals might take advantage of the non-itemizer deduction,' said AFP General Counsel Walter Sczudlo. 'When members of the House Ways and Means and Senate Finance Committees, as well as the Joint Committee on Taxation, all express concern about a proposal, it's difficult for that idea to get serious consideration.'
However, Sen. Rick Santorum (R-Pa.) has indicated that he will push for a more limited version of the non-itemizer deduction this year, noting that both bodies of Congress have passed the proposal in past years.
Bush's budget does contain funding for the IRA rollover, as well as for other charitable giving incentives, including an enhanced deduction for contributions of food inventory. Bush mentioned the IRA rollover provision recently in a speech at the White House Faith-Based and Community Initiatives Leadership Conference.
Dropping a Billion-Dollar Idea?
Ironically, just as the Bush Administration has dropped it support for the non-itemizer deduction, the United Way of America has released a new study showing that the provision would result in a 26.7 percent increase in giving to the organization by non-itemizers. The result of that change would be an additional $217 million in contributions to UWA every year.
In its press release about the study, UWA notes that the provision would also spur giving to other organizations. Given that non-itemizers contribute approximately $36 billion annually to charities, the provision could be expected to increase giving by several billions dollars each year.
For more information about the study, go to the UWA website.
Related AFP ResourcesTax Reform Bill Would Reduce Giving, Repeal Johnson Amendment
Charitable Giving Coalition Sends Letter on Trump Tax Plan
AFP Rebuts Opinion Piece on Charitable Giving Incentive
New Charity Package Introduced in Senate
IRS Withdraws Substantiation Proposal Thanks to Thousands of Nonprofit Comments