UWA Drops Nonitemizer Report, As Groups Galvanize to Oppose It

United Way released a report yesterday detailing the benefits of the nonitemizer. According to United Way, the proposed nonitemizer deduction in the Senate tax reconciliation bill (formerly S. 2020, now incorporated in H.R. 4297) could increase charitable giving to United Way alone by a net $180 million a year. In a news release, United Way said that while the proposed deduction can be expected to cause a $62 million drop in giving by itemizing taxpayers--who would face a $210 floor for the first time--the amount of those willing to give to United Way because of the new deduction is expected to rise to $242 million--for a positive effect overall. Opponents of the provision fear that the provision would be a major shift by Congress away from the tax policy that grants taxpayers full credit for their support of charities. On Jan. 20, a group of more than 60 charitable organizations sent a letter to House and Senate tax committees urging them to drop the nonitemizer. The groups, which include the Association of Direct Response Fundraising Counsel and the North Shore Animal League, pointed out that, under the Senate proposal, before an individual can take a charitable contribution deduction, they must exceed the floor and can only deduct the amount in excess of the floor. The organizations believe that they will end up losing donors. They argued that $420 is a considerable sum of money and the provision could cause itemizing donors to give less, since the tax incentive would be reduced.
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