Nonprofit institutions and their lobbyists are slamming the tax reform bill signed into law by President Donald Trump for hurting charities, but the tax bill will actually improve charitable giving, according to the Wall Street Journal editorial board.
The Republican tax reform plan eliminates many of the deductions for charitable giving, causing the nonprofit world to worry about donations, particularly the end-of-year blitz of contributions that many Americans make at the end of the year.
“The tax code is now poised to de-incentivize the heart of civic action in America,” Dan Cardinali, president of left-leaning nonprofit lobbying group Independent Sector told The Washington Post. “It’s deeply disturbing.”
The law doubles the standard deduction, which could mean that people fewer people will itemize deductions, some experts warn. Without tax deductions for charitable giving, some nonprofits worry that donations will be smaller.
WaPo’s article, quoted in TheWSJ’s editorial, mentions United Way, Catholic bishops, and the Salvation Army as charities that have specifically condemned the tax bill.
The nonprofits condemning the tax reform bill “want to keep millions of Americans filing more complicated tax forms and paying higher tax rates.”
The gloomy outlook from charities doesn’t stand up to scrutiny, according to TheWSJ.
“Americans don’t need a tax break to give to charities, which should be able to sell themselves on their merits,” the article reads.
“We know that people’s number one reason to give is because it’s a cause they’re passionate about,” Lydia McCoy, vice president of the Colorado Nonprofit Association told Colorado Public Radio. “But, I do fear that we’ll see a decrease in giving because people won’t be doing the math necessarily around taxes and say I need to give ‘this much’ to get my full deduction.”
After former President Ronald Reagan’s tax reform in the 1980s, nonprofit giving expanded “precisely because so much wealth was created,” TheWSJ notes.
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