November 16, 2017 Update: The House passed bill H.R.1 Thursday afternoon, November 16. We are working closely with others in our nonprofit sector to monitor the tax reform discussions in Washington, D.C.
November 15, 2017:
It’s no secret private contributions make up the most important source of revenue to support charitable work across the country. Southwest Initiative Foundation — and the hundreds of vital nonprofits we work with across the region — rely on the generosity of individual donors.
Last week, the House Ways and Means Committee voted to pass the Tax Cuts and Jobs Act. This bill contains a number of provisions that would both directly and indirectly harm charitable giving.
The Joint Committee on Taxation (JCT) released an analysis of the impact of the bill on charitable deductions for fiscal year 2018. Their analysis finds that under this bill, charitable deductions would be severely curtailed. Under current law, JCT estimates that 40.7 million taxpayers will claim a total of $241.1 billion in charitable deductions in 2018. Under the Tax Cuts and Jobs Act, only 9.4 million taxpayers will claim a total of just $146.3 billion — a decrease of approximately 40 percent, or $95 billion.
Southwest Initiative Foundation believes that a strong charitable sector contributes to the strength and vitality of our communities. We agree that it’s time to look at reforms to our tax code that will spur economic growth and help the middle class. But this bill as written will discourage charitable giving and hurt the vital nonprofit organizations and the gaps they fill in our communities.