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Ending Charity Deductions Help Budget

Ending Charity Deductions Help Budget Looking for a way to put hundreds of billions of dollars back into the federal budget? Eliminating the charitable giving deduction would do just that. The charitable giving deduction is the piece of tax code that allows Americans who itemize their deductions to subtract donations they give to tax-exempt organizations from their taxable income. For example, if John Doe gave $100 to his church, he could document that donation and subtract it from the income on which he would be expected to pay taxes. Wealthier Americans get the most out of the charitable tax deduction, because their rate of taxation is higher. So if John Doe's income level puts him in a 35 percent income tax bracket, he would save $35 in taxes from his $100 gift. But if John Doe only pays 15 percent income tax, that same donation would only save him $15. And John Doe can't deduct anything over 50 percent of his total taxable income.


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