Rep. Walker proposes universal charitable deduction—with a cap

October 11, 2017

Tax policy leaders in the House and Senate are now writing legislative language to put detail on the Unified Framework for Fixing the Broken Tax Code, a broad outline of individual and corporate tax changes that includes plans to double the standard deduction to $12,000 for individuals and $24,000 for joint filers. This change could reduce giving by up to $13 billion per year as the percentage of taxpayers that itemize would drop from 33.3% to 5%, vastly reducing the number of donors incentivized by the charitable deduction. Nonprofit advocates have been asking policy leaders to protect giving while streamlining the tax system by creating a universal charitable deduction available to all filing tax returns. On October 10, Rep. Mark Walker(R-NC06) introduced a bill, HR 3988, that would provide a tax deduction for charitable giving by those who do not itemize, with a cap of one-third of the standard deduction. The League is partnering with the broader nonprofit community to rapidly analyze this proposal. While Rep. Walker's limited universal deduction proposal is a step in the right direction in response to the Unified Framework, we are looking into how the proposed cap would impact giving trends in comparison to current tax law. See our September 28 Advocacy Update for more background on tax reform.