09/16/2024

Within a Year, Trump’s Tax Cuts Caused a $20 Billion Reduction in Charitable Giving

When taxpayers give, they get a discount on their tax bill

Americans give about half a trillion dollars a year to charity. That money helps fund services for the homeless, fight diseases, run museums and other organizations doing worthwhile activities. Some donations, such as those supporting religious congregations, are expenditures that the U.S. government couldn’t legally make even if it wanted to.

That helps explain why the U.S. tax code encourages giving by offering some donors a tax break. When those taxpayers give, they get a discount on their tax bill through the charitable deduction. Overall, this deduction lowers tax revenue by tens of billions of dollars every year. To be sure, since giving is socially valuable, the forgone tax dollars might be worth it.

Many taxpayers stopped taking advantage of this tax break after President Donald Trump signed the Tax Cuts and Jobs Act (TCJA) into law in late 2017.

Please select this link to read the complete article from The Conversation.