A number of legislative proposals to limit the deduction for charitable contributions have appeared in recent years. These proposals have included: limiting the tax rate against which contributions may be deducted; a dollar cap on total itemized deductions; a floor below which contributions may not be deducted; and the replacement of the deduction with a tax credit available regardless of whether the taxpayer itemizes. Different types of limitations could have varying impacts on charitable giving.
The House Committee on Ways and Means held a hearing on tax reform and charitable contributions on February 14. The hearing examined the itemized deduction for charitable contributions as part of the Committee’s ongoing work on comprehensive tax reform and received testimony on proposals to modify the charitable contribution deduction. The hearing featured more than forty witness testimonies from prominent nonprofit organizations as well as leading academics.