Monterey, CA Charitable Deduction May Be Reduced By Congress

View From A Non-Profit Serving Carmel, Carmel Valley, Gonzalez, Greenfield, King City, Marina, Monterey, Pacific Grove, Pebble Beach, Salinas, Seaside And Soledad California

In 2011, non-profits dodged a bullet, convincing President Barack Obama to back off of a plan he had developed to limit deductions, including write-offs for giving to charity.  With Republicans and Democrats now trying to hash out a deal so we don't go over the so-called fiscal cliff, executives in the non-profit sector are worried this issue will bubble to the top again.  "What we're up against now is a mega fiscal issue, Chris Hansen, president of the Cancer Action Network (the advocacy arm of the American Cancer Society) told the Wall Street Journal.  "You worry that they will miss some important facts as they desperately try to come up with something that they can compromise on," he said.  Americans will pay $40 billion less in taxes this year due to the deduction for charitable giving, so it's a tempting item for Congress to target given our vast deficit.  However, cutting this deduction would have a major negative impact on giving, and many non-profits would likely go out of business and the clients they serve would be left with no help.  One well known Republican has come out publicly on the side of non-profits.  "I want to encourage charitable giving in this country.  I think a country that doesn't do that's going to be in real trouble," said Senator Orrin Hatch (R, Utah).  Senator Kent Conrad (D, North Dakota) said, "I don't believe for a moment there will be an elimination of charitable deductions.  But some reforms that affect charitable deductions—I think that's got to be on the table."  Lobbyists representing non-profits are descending upon Washington D.C., but they have a lot of competition.  Another controversial move is that Congress is considering eliminating the mortgage tax deduction.  Doing so could cause the housing market to drop precipitously, perhaps triggering another recession.  There are numerous lobbyists from homebuilders to lenders and others that would be impacted by the elimination of the mortgage tax deduction.  Keep your eyes on these important issues that will impact us all.

Please note that this blog reflects my personal opinion and may or may not reflect the opinion of Hands To Help Seniors and the individual members comprising the Board of Governors.