For the last several years our government has tried to decrease the charitable tax deduction for generous Americans.
If you missed the latest attempt at trying to fix what’s not broken, here’s what’s not broken. The Charitable Tax Deduction provides people with an income tax deduction when they make charitable donations to registered 501(c) (3) nonprofit organizations. The charitable deduction, authorized almost 100 years ago, was designed to ensure that the then new federal income tax would not create a disincentive for charitable citizens to give to nonprofit organizations that address community needs such as hunger, homelessness and the need for equal education.
Fast forward to 2013.
The same needs exist, but the complexity of our society has compelled us to expand our focus to issues such as drug abuse, domestic violence and support for people with disabilities. The nonprofit sector is familiar with heavy lifting, but statistics tell us our challenges are growing.
A recent national survey reported that nearly 50 million Americans are classified as “poor” by government income standards. In 2012 United Way Connecticut 2-1-1’s, 24-hour hotline answered over 550,000 requests for services, mostly for food and basic needs. Last month 47 million Americans who receive food stamps saw their benefits reduced, and Congress is still in session discussing further cuts to a program that is essential to the working poor. Add to that the possibility of another government shutdown and the debt ceiling debacle predicted to surface in February, and you have the perfect storm.
The nonprofit sector plays a critical role in communities across America and right here in Connecticut. From providing the most basic needs of food and shelter to training that leads to employment; from needing income supports to make ends meet to becoming independent through a skilled job that pays a living wage; or from providing child care and elder care so families are able to earn a living, nonprofits are vital to the lifeblood of our community.
In the past five years over $15 billion was donated to charity by Connecticut residents. The charitable deduction is used by people of varying income levels, not just those we might consider wealthy. The percent of people indicating they use the charitable deduction is the same for households with incomes between $50,000 and $150,000 plus. In Connecticut more than one-third of residents – at every income level – reported making charitable contributions on their federal tax returns and itemizing to report and claim their deserved deductions.
Yet three of every 10 Americans admit that if the charitable tax deduction were reduced or eliminated, they would reduce their charitable giving. It’s an obvious warning sign, but why put nonprofits in the eye of that perfect storm?
Limiting or enforcing a ceiling on the charitable tax deduction could cause already stressed safety nets to break. It would make difficult times even harder for those who need the help most.
The measure of a caring society is how it treats those among us who need some assistance from time to time. Let Americans be who they are, compassionate and generous when they see a need. Let them give from their hearts as much or as little as they please. The charitable deduction enables Americans to give more.
We have faith in our U.S. Senators Richard Blumenthal and Chris Murphy, and our U.S. Representatives Joe Courtney, Elizabeth Esty and John Larson, to preserve the charitable deduction in its entirety.
All we need is your voice to be sure the message is heard loud and clear. We care about our community.