New Charitable Deduction Bill Eyed for Tax Reform Package; Reform Permanence in Question

Chairman Mark Walker, R-N.C. of the Republican Study Committee, has introduced tax legislation that would create a new charitable contributions deduction for those who do not itemize. The Universal Charitable Giving Bill (HR 3988), would retain the current itemized charitable deduction. In addition, it would amend the Code to allow an above-the-line deduction for charitable contributions for individuals not itemizing deductions. The bill has a good chance of being included in Republicans’ overall tax reform package, Jack Minor, Walker’s communication director, told Wolters Kluwer on October 11.

Universal Charitable Giving Bill

The bill’s purpose is to better assist low-to-middle income taxpayers, according to Minor. “We want to broaden the base of who is incentivized to donate to charity and empower people to give freely to the organizations they approve of and appreciate. We feel very confident about the chances of this legislation, or at least the text of it, being included in some form in the final tax reform package,” he told Wolters Kluwer.

Under the GOP tax reform framework that was released by the Trump administration and top Republican lawmakers, the standard deduction would be raised from $12,700 to $24,000, thus likely lowering the number of individuals who would itemize. “Right now, we have 70 percent of taxpayers taking that standard deduction, and estimates say that would jump up to 95 percent [under the GOP framework],” Minor said. Under Walker’s proposal, taxpayers who take the standard deduction would still be permitted to deduct charitable contributions totaling up to one-third of the standard deduction.

Tax Reform Event

In related news, House Ways and Means ranking member Richard Neal, D-Mass., and Rep. Peter Roskam, R-Ill., discussed tax reform at an event on October 11 hosted by The Hill. According to Roskam, the Ways and Means Committee will move fast on tax reform legislation once Congress approves a fiscal year 2018 budget. “I think you can move right to a markup,” Roskam said. However, GOP lawmakers are “not going to do as well as we hoped in terms of permanence,” Roskam said, adding that they are still aiming to make as much reform permanent as possible.

Neal expressed concern at the event about his view on Republican efforts to move too quickly and privately on tax reform legislation. According to Neal, tax reform hearings should be held on the bill before a markup. Tax reform legislation is expected to be released by the Ways and Means Committee within the next two weeks.

By Jessica Jeane, Wolters Kluwer News Staff

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