Trump's tax plan could be bad news for the housing market, charitable giving, and local governments

Trump's tax plan could be bad news for the housing market, charitable giving, and local governments

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Here again, the higher standard deduction under the Trump proposal means that this benefit of charitable giving would vanish for many taxpayers. 

"As [the standard deduction] goes up, it's reducing the incentive for giving," David L Thompson, the vice president for public policy at the National Council of Nonprofits, told Business Insider. 

But there's an even bigger threat to nonprofits: One version of Trump's tax plan proposes capping the wealthiest Americans' deductions to $100,000 for single filers, and twice that for those who are married. This means that wealthy couples who want to give a a million dollars to fight poverty or put their names on a college building would now only be able to deduct a fifth of that. 

"Clearly we feel strongly on that," Thompson said, adding that data from states that have capped deductions show it seriously hurt nonprofits, sometimes by amounts greater than the additional revenue the government brought in. 

On top of that, there's another reason wealthy givers may be disincentivized to be generous under the tax plans: a lower top tax bracket also means donors save less on their taxes when they give. 

Source Name: 
Business Insider
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