Would your nonprofit survive if suddenly private donations dwindled? If the Senate Democrats have their way, you may be forced to find out. They want to reduce the value of itemized deductions, which includes the charitable deduction, taken by the wealthiest taxpayers.
The Senate Democrats’ federal budget plan lays out several options to get this done, including President Obama’s plan to simply put a cap on itemized deductions, which would decrease the financial benefit to wealthy donors by about 20%. Another option presented is putting a dollar cap on the total amount of deductions, which may be most deleterious to nonprofits as taxpayers could max out the cap on other deductions making the charitable deduction moot.
If you read our blog, you already know that this type of limitation has been tried before. But, once again, the potential $1 trillion of new revenue estimated to result from this type of limitation seems hard for Congress to resist.
Nonprofits across the country have immediately come out in opposition to this plan. How would it affect your nonprofit? If you or your nonprofit are concerned, be sure to contact your Senators and members of Congress to let them know your position.