A study from the American Enterprise Institute predicts the Tax Cuts and Jobs Act of 2017 will reduce charitable giving by at least $16.3 billion 2018.
The conservative think tank was looking to quantify the impact of the new tax policy on charities, and by applying the current tax policy to thousands of real tax records from previous years, researchers were able to predict a 4 percent decline in charitable giving.
“The biggest thing that this new law does is it makes it less attractive to itemize your deductions,” said tax expert Alan Viard. “Mainly because they made the standard deduction almost twice as large as it used to be.”
House Resolution 5771 would move charitable donations “above the line” so even those who don’t itemize can claim a deduction. The American Enterprise Institute analysis predicted this would boost charitable giving by $21.5 billion, but Viard said there’s little energy in Congress to wade into another tax debate.
EDITOR’S NOTE: This story has been modified to reflect the percent decline in charitable giving.
