Tax Break Produces $11-Billion for Charities
April 23, 2007 | Read Time: 1 minute
A special federal tax break passed after Hurricane Katrina probably spurred $11-billion in charitable donations, reports The New York Times.
The sum is three times what Congress expected when it passed the tax break in 2005 and means that the government may lose more than $3-billion in tax revenue as donors write off their gifts.
The temporary tax break allowed people who made cash gifts to almost any nonprofit group in the months after Katrina hit to deduct an amount equal to all of their adjusted gross income, rather than the typical allowance of 50 percent.
It is unclear how Congress will view the new figures. Some observers say Congress might now see it as wise public policy to encourage greater charitable giving. But others say lawmakers will be put off by the cost to the federal treasury.
