Rep. Mark Walker (R-N.C.) announced Monday that he is planning to mark “Giving Tuesday” by reintroducing his legislation that would allow more people to claim a tax deduction for charitable contributions.
Walker’s bill would allow people to claim a tax deduction for charitable donations even if they do not itemize their deductions.
“The Universal Charitable Giving Act allows everyone to deduct charitable giving, regardless of itemizing status while increasing support for the great work our faith-based and charitable organizations contribute,” Walker said in a news release on the eve of Giving Tuesday, when nonprofits encourage donations.
Under the federal tax code, people can only claim a deduction for charitable contributions if they itemize their deductions rather than claiming the standard deduction. Taxpayers who itemize their deductions tend to be higher-income than taxpayers who take the standard deduction.
Republicans’ 2017 tax-cut law significantly increased the size of the standard deduction, therefore reducing the number of people who itemize deductions. This tax change has led nonprofits, as well as some lawmakers on both sides of the aisle, to be concerned that there could be a drop in donations to charities.
The Fundraising Effectiveness Project reported that in 2018, the first year of the GOP tax law, charitable giving was up slightly but the number of donors declined. A study from Indiana University’s Lily School of Philanthropy found that charitable giving by individuals declined slightly in 2018.
Walker’s bill would create a charitable deduction that people can take in addition to taking the standard deduction. This universal charitable deduction would be capped at one-third of the standard deduction amount — about $4,000 for individuals and $8,000 for married couples.
In the last Congress, Walker’s bill had a bipartisan group of co-sponsors. The bill is also backed by a number of nonprofits, including the American Cancer Society, the Salvation Army and United Way Worldwide.
Walker isn’t the only lawmaker who has offered legislation to create a universal charitable deduction. Similar bills have been introduced by Reps. Chris Smith (R-N.J.) and Danny K. Davis (D-Ill.).