I was hopeful that the new White House budget released last week would be more friendly to charities and charitable tax deductions than the proposed budgets in past years. Yet I was once again disappointed. Fortunately, thanks to the overwhelming number of Members of Congress from both parties who understand the critical importance the tax code plays in incentivizing charitable contributions, it is unlikely that the proposal will become law.
Although the White House has indicated that its tax reform proposals would not put charities at a disadvantage, the administration's Fiscal Year 2013 budget does in fact disincentivize large charitable gifts. By once again limiting the value of charitable contributions, the Administration has caused alarm for America's charities and the millions we assist, particularly during this time of economic distress.
We understand the need to find ways to address the country's significant budget dilemma. Nevertheless, taking steps that could diminish charitable contributions at a time when so many Americans in desperate financial straits are dependent on the services of charitable organizations is the wrong approach.
It's worth remembering that unlike other tax incentives, the charitable deduction is unique in that it promotes behavior that provides no direct benefit to the donor.
We urge our policy makers to find an alternative for increasing revenues that will not have an adverse impact on the very organizations that are working to provide help to so many Americans who are struggling in these tough financial times.
If this proposal moves forward, this change in the U.S. tax code will result in America's charities losing billions of dollars a year in private support that our country desperately needs.
To read the specific language affecting charitable tax contributions in the Administration's FY 2013 budget, click here.