Jewish Federations Support Protection
of Charitable Giving Incentives
February 6, 2012 -- The Jewish Federations of North America appreciates the Obama Administration’s acknowledgement of the importance of retaining charitable giving incentives. As one of the most vocal leaders in the effort to oppose White House attempts to reduce the tax deductibility of charitable contributions, JFNA is gratified that the Administration has changed its position on the issue. JFNA recently sent a letter to White House Chief of Staff Jack Lew commending President Obama for recognizing the importance of tax incentives for charitable giving.
“We are especially gratified that the Obama Administration now agrees that any fundamental tax reform should not create disincentives to charitable giving by reducing the tax deductibility of charitable contributions,” said William Daroff, vice president for public policy and director of the Washington office of JFNA, in the letter.
In the aftermath of President Obama’s State of the Union address, when outlining the President's proposal to raise taxes on those making more than $1 million per year, the Administration announced that the deductibility of charitable contributions would be maintained.
The announcement represents a change in the administration’s previous proposals over the past three years that would have limited the tax benefits for itemized deductions, including charitable contributions, for wealthy taxpayers. In these proposals, the tax benefit of all itemized deductions, including charitable contributions, would be capped at 28 percent. This would increase the after-tax-cost of a $10,000 donation by almost $1,200, or about 30 percent, if the top statutory tax rate returns to 39.6 percent.
The charitable contribution deduction in the Federal income tax code has fostered private philanthropy for nearly 100 years, and is an indispensible source of funding for charities that provide vital and viable alternatives to direct government programs. Unlike other tax incentives, the charitable deduction is unique in that it promotes behavior that provides no direct benefit to the donor. JFNA advocates that tax policy should encourage charitable giving, especially during times of economic recovery and when charitable resources are under great stress.
“One of the principal public policy priorities of JFNA is maximizing incentives for charitable giving,” said Daroff in the letter, “especially at a time when America’s charities are being asked to provide more social services with diminishing resources.”
Read JFNA’s letter to the White House about charitable giving incentives.
For more information, please contact Steven Woolf, Senior Tax Policy Counsel at 202-736-5863.