The House Ways and Means Committee will be conducting a hearing tomorrow to examine the itemized deduction for charitable contributions as part of the Committee’s work on comprehensive tax reform.
As we’ve discussed in recent posts (one on the fiscal cliff generally and another on the phase-out of itemized deductions), various different proposals to limit the charitable deduction have been presented over the past couple of months, and the issue is far from settled. Potential modifications to the current deduction regime include:
- 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.
In announcing this hearing, Chairman Dave Camp (R-MI) said, “Public charities and private foundations perform invaluable services for our society, especially during this time of economic slowdown and high unemployment. These organizations depend upon the goodwill of the American people – the most giving and charitable people in the world. Because of the critical role that charities play, the Committee must hear directly from the charitable community before considering any proposals as part of comprehensive tax reform that might impact their ability to obtain the resources they need to fulfill their missions.”
In next week’s post, we will discuss some key points and testimony from the hearing.