October 13, 2005 | Read Time: 2 minutes
Members of Congress have introduced legislation that would offer new tax breaks to spur charitable giving.
One key provision of the House and Senate bills would allow people who do not itemize deductions on their federal income-tax returns to write off some of their charitable gifts.
Another provision would permit older people to shift money from their individual retirement accounts directly to charity without paying federal income tax on the withdrawals.
The House and Senate bills are similar to measures that were approved two years ago by both chambers (The Chronicle, October 2, 2003) but were never enacted into law.
Sen. Rick Santorum, Republican of Pennsylvania, a chief proponent of the legislation, said he is hopeful that the proposal will become law this year. Members of Congress should look favorably upon the legislative package, he said, especially with charities’ response to Hurricane Katrina fresh on their minds.
But others in the House and Senate are less certain of the legislation’s prospects, pointing out that members of Congress are already struggling to find money to pay for the war in Iraq and for the recovery from Hurricanes Katrina and Rita. “Members have gotten a little more focused on the cost of things,” said one Congressional aide who asked not to be named.
The Joint Committee on Taxation last year estimated that charity tax incentives similar to the proposals in the new legislation would cost the Treasury $12.6-billion.
A coalition of charities that includes the United Way of America, Catholic Charities USA, and the March of Dimes has written Sen. Charles E. Grassley, Republican of Iowa and head of the Senate Finance Committee, to urge passage of the charitable-giving legislation, particularly the deduction for people who do not itemize on their tax returns.
The deduction “would generate billions of dollars in increased giving to charities each year,” wrote the coalition, which includes hundreds of large and small charities.
The bills (S 1780, HR 3908) will soon be available online at http://thomas.loc.gov.
