March 22, 2001 | Read Time: 2 minutes
By ELIZABETH SCHWINN
Numerous bills have been introduced in the House and Senate to promote charitable giving. Perhaps most likely to pass this year, charity experts and others say, is a measure that would permit donors over age 59 to donate money from their I.R.A.’s without paying taxes.
Lawmakers in both chambers have introduced measures on the individual retirement accounts.
Another much-watched measure pending in both the House and Senate would allow people who don’t itemize on their taxes to write off their gifts. But at a hearing of the Senate Finance Committee last week, some doubts were raised about whether that would be wise policy.
Former Internal Revenue commissioner Donald C. Alexander, now a Washington lawyer, said the standard deduction taken by people who don’t itemize includes an estimated amount for charitable gifts, so creating a new charitable deduction could allow some taxpayers who don’t itemize to effectively take the same deduction twice. Mr. Alexander added that the deduction would probably not spur enough additional giving to compensate for the lost tax revenue.
C. Eugene Steuerle, a senior fellow with the Urban Institute, said those problems could be solved by passing a provision that would allow all taxpayers to deduct only the amount over $150 that they contribute to charity in a year. Such a provision might encourage people to increase their gifts to get a tax break, he said, and stem losses caused by allowing people who don’t itemize to claim charitable deductions.
Among other charity-related tax measures that have been introduced in Congress:
- Reps. Phil Crane, Republican of Illinois, and Cliff Stearns, Republican of Florida, have introduced a bill (HR 804) that would repeal the federal excise tax on private foundations. Foundations currently must pay an excise tax of up to 2 percent on their investment income.
- Rep. Dan Burton, Republican of Indiana, has proposed a bill (HR 494) that would allow all taxpayers to claim a credit of up to $200 against their income taxes for charitable contributions.
- Sen. Dick Lugar, Republican of Indiana, has offered legislation (S 37) to expand the tax deduction for businesses that give food to food banks.
