Grassley Works to Help Tax Code Encourage Charitable Giving
WASHINGTON – Sen. Chuck Grassley, chairman of the Committee on Finance, today saidhe is working toward making the tax code more hospitable to charitable giving because oftremendous need among charities and high demand from would-be donors.
“Charities have a lot of needs, and Americans have a lot to give,” Grassley said. “It makesperfect sense to make sure the tax code eases the flow of generosity from taxpayers to worthycauses. We can’t have enough foot soldiers in the army of compassion.”
Grassley’s comments came after a hearing examining proposals from President Bush andothers to encourage charitable giving. The President’s $1.6 trillion tax relief proposal contains $55billion over 10 years in tax code changes to encourage charitable giving.
Grassley said the President’s effort is likely to net strong support from would-be donors.Taxpayers now face an uneven playing field when it comes to charitable giving, Grassley said. Themajority of Americans – 70 percent – don’t itemize their deductions on their tax returns. Those nonitemizerscan’t deduct charitable contributions. The centerpiece of the President’s tax proposals toencourage charitable giving allows non-itemizers to deduct their charitable contributions.
Grassley said he looks forward to working with the President and his Committee on Financecolleagues to craft a tax bill that effectively encourages charitable giving and targets those most inneed. The ways to encourage charitable giving and their targets are numerous, Grassley said. Justtwo examples from today’s hearing witnesses included:
Testimony from Mary Sue Coleman, president of the University of Iowa, who expressedsupport for the President’s plan to allow tax-free charitable gifts from individual retirementaccounts. She said many prospective donors to the university are interested in donating theirretirement accounts. Those likely to donate retirement accounts include not only highincometaxpayers, but also teachers, nurses and librarians, she said.
An expression of support from America’s Second Harvest, a national network of food banks,for legislation that would provide a tax incentive for family farmers and businesses to donatefood for humanitarian aid. The network said the need for food donations is so great that localhunger relief charities have turned away “low-income people at the moment of their greatestneed.”
Grassley said encouraging charitable giving is particularly important when the economy isslowing, and more families need help. Giving middle-income families a tax cut also will encouragecharitable giving, he said. “When the federal government allows middle-income families to keepmore of their hard-earned wages, I think a lot of that money will end up in the collection plate or theSalvation Army kettle,” Grassley said. “We have to remember that overall tax relief is a critical partof encouraging charitable giving.”
Next Article Previous Article