Comparing the Candidates’ Stances on Charitable Deduction, Other Tax Issues

Republican candidate Donald Trump last week revealed a revised tax reform plan that limits the deductions that taxpayers can take—including the deduction for charitable contributions. Democratic candidate Hillary Clinton’s proposed plan, which has not recently been modified, also would limit the total amount of deductions taxpayers can take.

A tax reform proposal offered by Trump last year preserved the current charitable deduction. However, this latest version proposes to cap all itemized deductions – including the charitable deduction, mortgage interest deduction, and state and local taxes paid – to $100,000 for single filers and $200,000 for couples. The plan also proposes changing the individual income tax code by lowering marginal tax rates on wage, investment, and business income, consolidating seven tax brackets into three. The plan also would eliminate federal estate and gift taxes while eliminating step-up basis for estates valued at more than $10 million.

Hillary Clinton has proposed a top estate tax rate of 45 percent while lowering the estate tax exclusion to $3.5 million in assets, according to the Tax Foundation. Her proposal also caps the tax benefit of itemized deductions at 28 percent of the deduction.

Sandra Swirski, executive director of the Alliance for Charitable Reform, criticized Trump’s position:

“We reiterate our call for Mr. Trump to preserve the full scope and value of the charitable deduction. It is unique among all other credits and deductions because it encourages individuals to give away a portion of their income for the benefit of others. The donor is left worse off financially while the independent civil society is strengthened.”

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