Darn that looming “fiscal cliff”. We’re all worried about what will happen if a number of a laws, which, if unchanged, could result in tax increases and spending cuts that will affect our economy in 2013. Even non-profits have started stressing about how Congress’ upcoming actions to prevent “the most tedious conversation topic ever” might hit close to home.
They’re concerned that Congress will alter the current tax system, making it less appealing for people to give to museums, foundations, hospitals, universities, and the like. As it stands, the idea that Congress would place any additional caps on tax-deductible donations appears to have gained some traction across party lines. Even our President supports it, according to Alex Rogers, reporting on the issue for Time:
President Obama already supports limiting the amount of tax-free giving Americans can do; his proposed 2013 budget would limit the value of all itemized deductions to 28% for families making $250,000 or more a year, or for individuals making $200,000 and up.
Currently, you can deduct up to 35 % of your income for charitable deductions. That’s a 7% change, which is a lot when you look at the numbers. Charitable deductions are the government’s 9th largest tax expenditure, and the sheer size of giving in the budget pie has led some non-profits, like the Charitable Giving Coalition, to assert that over $5.6 billion annually would be lost if these cuts were enacted.
Non-profits already suffer from cuts to government spending each year and at this point, they can’t afford to lose more revenue. This is a blow they don’t need.