Why Do You Give to Charity?

Amanda Aronczyk Nov 8, 2011

If you’re answer is: “For the tax breaks, of course!” you might be offered less of an incentive in the near future.

The idea of reforming and possibly reducing charitable tax deductions is just one of many potential amendments to the tax code that has been floated since the fiscal crisis worsened.

But it’s a political flop. In a rare show of unanimity, both Republicans and Democrats hate the idea.

Still, President Obama continues to support it; he’s included it in two budgets as well as in his recent jobs bill. According to Senior Editor Suzanne Perry at the Chronicle of Philanthropy, the possibility of charitable deduction reform doesn’t seem to be going away.

I think that even though it hasn’t passed, yet, what some charities are worried about is that it will stay on the table as long as we’re having economic difficulties. And what they’re really worried about right now is the Supercommittee.

The Joint Select Committee on Deficit Reduction (aka Supercommittee) is a bipartisan group tasked with finding as many nips and tucks in government spending as it can without permanently disfiguring the patient.

In more flush times, the charitable tax deduction is considered sacrosanct, explains Perry, because it rewards generosity.

You’re saving on money that you’ve given to someone else. Whereas with the mortgage deduction you’re saving on money that you spent on yourself.

It’s unclear what kind of impact a reduction would have, but three recent reports speculate it could be anywhere from $1 billion to $3.2 billion dollars.

Marketplace is on a mission.

We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.

Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?

Your donation is critical to the future of public service journalism. Support our work today – for as little as $5 – and help us keep making people smarter.