In a recent New York Times column, Biden Aides Quietly Say His Tax Increases Would Help Charities, the author appears to characterize charitable giving as a “new workaround” to proposed tax increases on the wealthy. Later on, an analyst from a think tank is quoted saying charitable giving is “tax avoidance.”
We find the suggestion that the charitable deduction is a workaround or loophole troublesome. Not only is the charitable deduction not new – it is one of the longest-standing deductions in the tax code – but it also encourages donors to give away more of their assets with nothing tangible in return, leaving them worse off financially.
The charitable deduction, codified in the tax code more than 100 years ago, is a lifeline for charities that provide critical services and programs across our country. It is not a loophole for the wealthy, rather a recognition that assets given to charity are not the donor’s income and should not be taxed as such.
Over the past year, charities have stepped up to support their communities in a time of unprecedented need. Many charities have been forced to shut their doors, while others have only been able to remain open due to the generosity of American donors, many of whom receive a deduction for their giving.
Lawmakers and the Biden administration have made it clear that this giving should be exempt from taxation. We should continue to encourage that generosity.