Walker Introduces the Universal Charitable Giving Act to Incentivize Donations to Charity in Tax Reform

October 12, 2017
Press Release

WASHINGTON, D.C. – U.S. Representative Mark Walker (R-N.C.) introduced a bill that would incentivize charitable giving for low and middle income earning individuals and families.

The Universal Charitable Giving Act establishes an universal charitable deduction for individuals and married couples who do not itemize, in addition to the standard deduction. This would be an above-the-line deduction up to one-third of the standard deduction – about $2,100 for individuals and $4,200 for married couples.

As reported by The Hill: "Walker’s bill would allow taxpayers who take the standard deduction to also deduct their charitable contributions up to an amount equal to one-third of the standard deduction. The standard deduction for married couples under current law is $12,700 and would be increased to $24,000 under the GOP’s framework."


To better explain the importance of the Universal Charitable Giving Act, what it does, and how it helps charities, Walker released a video (above) featuring the Baptist Children's Home of North Carolina. In the video, J. Keith Henry, Chief Operating Officer for Baptist Children's Homes of North Carolina explains that upwards of 65 percent of their budget comes from charitable donations, and that any policy that discourages giving to charity could have a harmful impact on their services. 

A key aspect of the recently released GOP Tax Reform Framework from the White House and Congress is to double the standard deduction so that lower and middle income families keep more of their paycheck and have more income that is not taxed. 

Under the current tax system around 70 percent of tax filers claim the standard deduction. Estimates have shown, under the new GOP Tax Reform Framework, that number would rise to 95 percent.
 
With current law, only taxpayers who itemize their deductions can deduct charitable donations to qualifying organizations. As a potential unintended consequence of the tax plan, the doubling of the standard deduction will lower the number of itemizers and likely decrease charitable giving incentives for many taxpayers.
 
The Universal Charitable Giving Act incentivizes charitable giving for low and middle income taxpayers. It would not only help individuals and families who would likely stop itemizing their deductions under the new tax plan, but would also encourage taxpayers who already claim the standard deduction to give the charities and causes they believe in.
 
This bill is focused on helping charities, and the lower and middle class. In fiscal year 2017, roughly 71% of the tax expenditures for charitable giving will be claimed by taxpayers who earn $200,000 a year or more. By broadening the base of people who can deduct charitable donations, this bill aims to empower lower and middle income earners to direct funds willingly to socially productive organizations they wish to support.

You can read the full text of the legislation here. 

The bill has already garnered attention of prominent organizations such as the Alliance for Charitable Reform, Charitable Giving Coalition and the Independent Sector.

"The Charitable Giving Coalition (CGC) applauds Congressman Mark Walker (R-NC-6) for standing up for America’s charitable organizations and the communities they serve," Jason Lee, chair of the Charitable Giving Coalition said. "Congressman Walker’s bill expands good tax policy, providing an incentive to more Americans to invest in their communities through charitable giving. A non-itemizer deduction will become even more critical within the larger tax reform framework currently under consideration."

 
On Wednesday evening, Walker gave a speech on the floor of the U.S. House of Representatives to introduce the bill. You can watch the video here and above, and read the transcript here: 

"Today, I rise to announce the introduction of the Universal Charitable Giving Act. 

"Many Americans believe that people – not the government – offer the best solutions to solve the ailments that face our society. Strong families, strong churches, strong communities. These are the foundation of our nation, and by supporting charities we can make our communities and our country a better place for Americans from all walks of life.
 
"Giving to charity is crucial for economic prosperity, happiness, and the success of our people. But for too long, only the most wealthy have been incentivized to give to the causes they believe in. 
 
"The Universal Charitable Giving Act incentivizes charitable giving for low and middle income taxpayers. It would allow everyone to deduct charitable giving, regardless of itemizing status.

"With tax reform, our aim is to increase take home pay for middle America. And with my bill, our goal is to increase support for all charities. I urge my colleagues to support the great work of our faith-based and charitable organizations by supporting this bill."