JUST IN FROM WASHINGTON… “Charities Worry Gifts to Shrink With Romney Limits.”
Bloomberg, October 10, 2012.
This morning, United Way’s Steve Taylor spoke to Bloomberg about the charitable sectors’ worries concerning Governor Romney’s proposed $17,000 cap on all deductions. Taylor says “when tax policy reduces the amount that [donors] can give, they will just give less.” Taylor’s comments reflect growing concern amongst public charities that a President Romney would make it harder for charities to raise money.
The proposal comes from early last week when Governor Romney floated the idea of limiting all deductions to a $17,000 cap. During the Denver Presidential Debate, he reiterated his position, suggesting a cap in the range of $25,000 to $50,000. A campaign aide has said that Romney would work with Congress “to preserve access to tax preferences for middle-income folks, and charitable [deductions] in particular,” which suggests the campaign is beginning to identify some incentives that may warrant special treatment.
In an interview with CNN’s Wolf Blitzer last night, Romney said there will “of course continue to be preferences” in the tax code for mortgages and charitable contributions. However, Romney did not say whether those popular tax benefits would remain in place in their current form. These statements are a departure from Romney’s previous positions on tax reform, where he called for eliminating most itemized deductions (to help pay for lower rates).
According to a recent analysis by the National Association of Home Builders, the average married, joint-filing taxpayer who itemized in 2009 claimed $20,464 in itemized deductions. $10, 365 of which was consumed by deductions for home mortgage interest, $3,667 for state and local income taxes, and $3,287 for real estate taxes. This means that the average married filer already reaches $17,329 without even accounting for their charitable contributions, essentially eliminating the charitable deduction incentive.
With the election less than a month away, it will be important for the charitable sector to keep a close eye on Governor Romney’s positions.
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