Identical bills — S.618, sponsored by Sen. James Lankford, R-Okla., and H.R.1704, sponsored by Rep. Chris Pappas, D-N.H. — aim at extending deductions for charitable giving to those who decide not to itemize their deductions.
According to the One Nation Under God Foundation (ONUG), an organization focused on “pastor and voter education and Christian voter registration and turnout,” the 2017 tax cuts crafted under President Donald Trump had numerous benefits, but also created difficulty for those who desire to give to either their church or a charity. This new legislation hopes to fix that.
“The 2017 Tax Reform Act allows taxpayers to decide whether they want to itemize tax deductions or not,” said ONUG. “Those who choose not to itemize are given a standardized deduction. By taking the standardized deduction, taxpayers are then allowed to deduct $600 for charitable on a joint return or $300 when filing a single return.”
This raises concerns because those who attend their religious institutions weekly are less incentivized to give. With such a low deduction, the logical conclusion is that people will not be able to give as much.
Increasing the numbers, then, incentivizes people to give more to their respective communities. This is because the prior restraint of $600 or $300 would be lifted and significantly increased. The concern over reaching that dreaded number would go away, and ONUG is hopeful that by doing so private giving would increase and lead to help for those in need.
Specifically, ONUG is concerned about middle-class taxpayers and small businesses who decide to use the standard deduction route.
ONUG strongly opposes the current state of things and hopes that the joint filing return for standardized deductions can be raised to $7,500 and the single filing to $5,000.
Paul Caprio, executive director of ONUG, told Newsmax that the goal of his organization is to “encourage people of faith to give to church and those who need it.”
These two proposals would do just that.
Introduced in March of 2021, the identical bills in the House and Senate would amend the Internal Revenue Code of 1986.
The revised language in the code would read: “[T]he deduction under this subsection for the taxable year shall be equal to so much of the deduction determined under this section (without regard to this subsection) for such taxable year as does not exceed an amount equal to one-third of the amount of the standard deduction with respect to such individual for such taxable year.”
The bill, if passed, would affect taxable years after Dec. 31, 2020.
Tax reform will continue to be a major issue, with both parties disagreeing on the right steps needed to move forward. In all likelihood, this Congress may not act on either piece of legislation.
But midterm elections are less than four months away. With the power of the pocketbook sure to play a crucial role in these elections, tax reform could just as easily be around the corner.