The United Way of Florida is asking members of Florida’s Congressional delegation to vote against any final bill that critically undermines the charitable deduction as the current tax reform bills do.
While both the House and Senate tax reform bills technically preserve the “charitable deduction,” they will result in 31 million taxpayers who can currently claim the deduction not being able to claim it in the future, according to Indiana University’s School on Philanthropy. This translates into a loss of $13 billion in private donations to charities nationwide — a five-percent decrease in overall giving — that will be concentrated in faith-based, basic needs and disaster relief charities, which rely on gifts from middle class donors.
In Florida, 1.8 million donors claimed the charitable deduction in 2015, accounting for $13 billion. A five-percent loss would mean $651 million less to fund private food banks, homeless and domestic violence shelters, child care, job training and much more.
Our already tight budgets will be further impacted by lost dollars and will translate directly to reduced services and greater needs in our communities.
If tax reform in its current form is enacted, 95 percent of charitable givers will be taxed on their donations. Only the wealthiest donors — important donors to be sure — will be able to make tax exempt donations.
That result is inconsistent with our nation’s principles and is deeply unfair to the 95 percent of individuals — primarily Florida’s working class — whose charitable gifts are essential to communities across our state and should be valued equally.
Charitable giving is critically important in enabling local communities to meet local needs. Florida is growing, and charities and nonprofits are being asked to serve more and more people. Reducing the incentive to give will hurt most Floridians’ churches, Little League teams, community programs, and much more, including their wallets.
The United Way of Florida does not oppose meaningful tax reform that benefits the American people and our economy. However, provisions in current proposals pending before Congress — and therefore any potential conference report — gut the charitable deduction and will hurt millions of Americans. These provisions compel us to urge all members of Florida’s Congressional delegation to vote “No” on the final tax reform bill.
Ted Granger is the president of the United Way of Florida.