A Tax Man Looks at the Charitable Deduction

There has been some ink given to the proposed changes in the charitable deduction on our income taxes. As it’s currently being considered it will not affect many people, but many are still up in arms, most notably the tax-exempt organizations. They have reason to be concerned, considering that of the major deduction categories (medical, taxes, interest and contributions), theirs is the only one that involves a choice made by the taxpayer. The medical community was not alarmed when the medical deduction was taken away for 95% of us, because they either get paid or refuse to treat us. Obviously we have no choice on taxes or interest that we pay, other than to be lifetime renters. But giving to charity is a choice, so if that deduction is taken away, many of those organizations will see a drop in their intake. My question is, should it be that way?

For me, the crux of the matter is this: If I give to my church or a charity ONLY because I get a tax deduction, is it really charity? That doesn’t fit my definition of a “cheerful giver.” Without actually putting words in his mouth, my guess is that my pastor would say, “If the only reason you give to the church is for the deduction, we don’t need your money.”

I give to my church to be obedient, to be sure. But I also give because I honestly believe that obedience is responsible for all of the financial blessings that I continue to experience. (And the unknown financial disasters from which I am so far protected). That makes me cheerful!

So, in that context, the prospect of losing my charitable deduction is a bother, but not something that will send me into either rage or depression. The deduction in its current state is a pleasant byproduct of my giving, nothing more.