March 17, 2005 | Read Time: 2 minutes
The Bush administration no longer supports legislation that would provide a charitable deduction to people who do not itemize deductions on their tax returns, in part because “there was never a lot of enthusiasm for this from the standpoint of tax policy” from Congress, according to a White House official.
About 70 percent of taxpayers currently do not itemize. Many charities have long been lobbying Congress to allow those taxpayers to deduct their charitable gifts because they expect that such a change would increase donations to charity by billions of dollars.
But James Towey, head of the White House Office of Faith-Based and Community Initiatives, said that the House and Senate had “completely different perspectives” on whether a deduction for people who do not itemize should be permanent or in force simply for two years. Mr. Bush was also influenced by nonprofit leaders’ own “mixed feelings about what the non-itemizer might mean to charities,” said Mr. Towey.
The Bush administration had in previous years supported the deduction for people who do not itemize.
Despite the president’s change of heart on the matter, the United Way of America announced last week that it supports legislation introduced in January (by Sen. Rick Santorum, Republican of Pennsylvania) that would allow people who do not itemize to write off some of their charitable gifts. The organization estimated that United Ways could receive an additional $217-million in contributions each year if the legislation became law.
Meanwhile, President Bush made clear in a speech to leaders of religious charities this month that he continues to support other measures aimed at increasing charitable giving. Among them: Allow donors to give money to charity directly from their individual retirement accounts without incurring taxes, and expand tax breaks that encourage businesses to donate food to charities.
Of the retirement-account proposal, Mr. Bush said, “It’s a simple change, but it’s a substantive change to law. And I believe it will help encourage giving.”
