No, tax reform will not devastate charitable giving

As the historic Republican tax reform bill is expected to pass one or both houses of Congress today, the campaign of insufferably idiotic mass hysteria peddled by the left and its allies in the media should reach its peak.  It would take a lifetime to document the litany of misinformation and outright lies being promulgated about the bill, so in the interest of not devoting my entire life to this undertaking, I'll address just one blatant untruth about the bill: the notion that it will cripple charitable giving.

In case you're not in the mood to suffer through this squeamishly maudlin, intellectually vapid NBC News piece making the case, I'll summarize it for you: the provision in the tax bill that doubles the standard deduction – the portion of our income that is not subject to federal taxes – to roughly $12,000 for individuals and $24,000 for families will cause charitable contributions to dry up, soup kitchens to go out of business, and pretty much everyone in need of charity to suffer.  Politics of fear at its finest, folks.

An important caveat: like other mainstream left-wing outlets, NBC doesn't usually advance its political agenda by telling outright lies – that would be too obvious and artless.  Its M.O. is crafting misleading premises to arrive at erroneous conclusions – a particularly insidious propaganda technique.

When we file taxes, we can either take the standard deduction or "itemize" our deductions.  Itemizing makes sense for taxpayers whose tax-deductible expenses (these include charitable contributions, mortgage interest, property taxes, etc.) exceed the standard deduction permitted by the IRS.  In other words, a family whose tax-deductible expenses exceed $12,000 might want to itemize their deductions to lower their taxable income.

What the left and the dishonest NBC report are in effect alleging is that doubling the standard deduction will decrease the incentive for some taxpayers to contribute to charity because they will claim the higher standard deduction instead of itemizing.

The unfounded and frankly absurd assumption is that the percentage of donors in the $12,000-$24,000 itemized range contribute to charity not primarily out of the goodness of their hearts, but in order to reduce their tax burdens!  This is a curiously cynical assessment of the human race, and even if true, it is rendered moot by the fact that for this narrow group of taxpayers, doubling the standard deduction would not increase their taxable income – it would merely make their taxable income the same, whether or not they itemize.

For example, let's say the Jones family's only tax-deductible expense is its $15,000 annual contribution to the Salvation Army.  Under current law, the Joneses would reduce their taxable income by $3,000 more if they itemized instead of taking the automatic $12,000 deduction.  But if the standard deduction doubles to $24,000, the Joneses wouldn't have to itemize to realize the same tax break.    

Another critical point: 68.5% of taxpayers take the standard deduction instead of itemizing.  Why?  Because most households don't spend $12,000 on tax-deductible expenses.

Interestingly, and something that NBC News unsurprisingly failed to mention, itemizing mostly benefits the wealthy.  According to the Tax Foundation:

The IRS data shows a clear trend: the higher a household's income, the more likely it is to itemize deductions. Only 6.0 percent of tax returns with under $25,000 in income chose to itemize deductions in 2013. On the flip side, 93.5 percent of tax returns with over $200,000 in income were itemizers.

What this means is that doubling the standard deduction is a boon to the lower and middle classes.

There's simply no conceivable way that doubling the standard deduction would have a negative impact on charitable contributions.  On the other hand, there's a case that this provision might increase many people's incentive to give by increasing their disposable income.  But of course, NBC would never float that possibility.

The left loves to accuse conservatives of using the politics of fear.  I've written about how most politics is inherently grounded in fear, and how the left is impressively adept at employing this tactic.  The absurd, thoroughly dishonest claim that doubling the standard deduction will devastate charitable contributions ought to be the left's fear tactic coup de grâce.

Eugene Slaven is a freelance writer and the author of the comedy thriller A Life of Misery and Triumph and the self-help book Enemy Thoughts.  Connect with Eugene on Twitter at @eslaven, on LinkedIn, and on Facebook.

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