Non-itemizers Charitable Deduction Plan is a complicated name for a simple plan. Basically, the proposal recently set forth by President George W. Bush would allow all federal taxpayers to deduct contributions to charitable causes before figuring their federal income taxes. Under present law, only those who itemize their federal taxes can claim deductions for charitable giving.
It was not always this way. The Tax Reform Act of 1986 abolished the opportunity of deducting charitable contributions from federal income taxes for those who file non-itemized returns. That decision impacted about 85 million Americans, the nearly 70 percent of federal taxpayers who do not file itemized tax returns.
In 1986, Baptists were among the strongest opponents of abolishing charitable deductions for non-itemizers. The Baptist Joint Committee on Public Affairs, which then represented religious liberty concerns for Southern Baptists, testified against the change. Baptists cited tax fairness, saying if itemizers were allowed to deduct charitable contributions from federal income taxes, non-itemizers should be offered the same right.
Joint Committee officials also argued that taxing charitable contributions, the result of not allowing their deduction, amounted to restraint of religious activities by government policy. In effect, the policy took money away from religious groups by discouraging charitable giving through tax policies.
Fifteen years later, that reasoning is being echoed by President Bush. In presenting the Nonitemizers Charitable Deduction Plan, Bush said, “It is not enough to praise the work of private and religious groups. … Without more support and resources, both private and public, we are asking them to make bricks without straw. Most of these groups depend on charitable contributions. … Under my plan people who don’t itemize will be given the same treatment and incentive to give as people who do.”
This time, Baptists are among the supporters of this tax change. The Baptist Joint Committee, which now does not represent Southern Baptists, wrote, “President Bush is trying to do right and all of us should applaud his recognition of religion’s vital and helpful role in society. His goal of tax relief tied to charitable deductions by non-itemizers deserves our support.”
We have not seen any position on this issue from the SBC’s Ethics and Religious Liberty Commission but are confident the commission will offer its strong support.
Washington observers predict Bush’s proposal has a good chance of being adopted. Republicans are lining up behind the idea. Democrats are reacting favorably, in part, because former President Clinton proposed similar legislation in the last budget he submitted to Congress. Bipartisan support could be the key to correcting a mistake made a decade and a half ago.
A study by PricewaterhouseCoopers predicts the proposal, if adopted, could result in an additional $14.6 billion for charities and 11 million new donors. The study says overall charitable giving could increase by about 11 percent and giving by persons with family earnings between $20,000-$30,000 could jump almost 25 percent, from $611 to $767 annually.
Such a monetary infusion could help charities take up about 5 percent of the governmental cutbacks in social programs, these studies contend.
Religious groups such as Baptist churches are likely to benefit from this proposal if it is adopted. Some people may be more inclined to give to churches knowing they will receive a tax deduction for their gift. That is a sad commentary but a true one.
Christians are supposed to give out of obedience to God’s command. Giving is supposed to be an act of worship. Giving helps recognize God as the source of all one has and one’s responsibility as a caretaker of material blessings. These are inward acts, acts of the heart. They should not be impacted by national tax policies.
The United States is one of the few nations that allows charitable tax deductions at the source. That is, one can deduct charitable gifts before figuring tax liabilities. As long as this principle remains the law of the land, it should be applied fairly and evenhandedly to all tax payers. That is the goal of the Non-itemizers Charitable Deduction Plan as we understand it.
President Bush’s plan is accompanied by mounds of details. Already people are arguing about ceilings for charitable deductions and other implementation matters. We do not have the expertise to evaluate the details. Our goal is simply to endorse the concept of a fair tax policy that does not inhibit religion through inappropriate taxes. That is what Baptists championed when opposing the 1986 Tax Reform Bill. That is what should be championed in supporting this proposal.
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