Congress discusses bigger tax deduction amid coronavirus

'The public need is soaring for their help, at a time when charitable giving and other revenue streams have declined drastically as a result of the pandemic'

Contract drivers paid by Amazon collect bags of free groceries to deliver from the Bread for the City social services charity during the coronavirus disease (COVID-19) outbreak, in Washington (photo credit: JONATHAN ERNST / REUTERS)
Contract drivers paid by Amazon collect bags of free groceries to deliver from the Bread for the City social services charity during the coronavirus disease (COVID-19) outbreak, in Washington
(photo credit: JONATHAN ERNST / REUTERS)
WASHINGTON – The Congressional Joint Economic Committee held a meeting on Tuesday to discuss the need to provide a more significant tax deduction for charitable donations in response to COVID-19. Chairman Mike Lee (R-Utah), said that philanthropic organizations are being asked to do more during the coronavirus crisis when many Americans have less to give.
"While the CARES Act, passed earlier this year, did add an above-the-line deduction of $300 for non-itemizers, much more could and – I believe – should be done," he continued. "I called this hearing to talk about how – especially in this time of great hardship, when charitable giving is so essential – Congress can better address this disparity. In recent weeks, I have been part of a bipartisan working group to develop legislation reforming this inequity."
Senator Amy Klobuchar (D-Minnesota) mentioned a variety of charitable organizations, including Jewish Federations, that are struggling financially. "Many of the organizations in Minnesota take deep cuts, including significant layoffs," she said. These nonprofits are on the front line. I think the smartest thing we can do right now is to keep them strong."
"I think what we see here is that the pandemic is squeezing our nonprofits on both ends," the senator continued. "The public need is soaring for their help at a time when charitable giving and other revenue streams have declined drastically as a result of the pandemic.
I was really struck by that when I went and visited one of our food banks, and someone who is in the line said that they had previously volunteered," she recalled. "They were at a job, and they volunteered, and now they were in line to get food. And so things are changing, and a lot of people are out of work that never even imagined they'd be out of work. And a lot of people are having trouble financially."
“Nonprofits don't exist just for a single event, a single person rises and falls, and then they go away,” said Sen. James Lankford (R-Oklahoma).
“They exist for all people in the community; there are churches, or synagogues or mosques. They're feeding the homeless. They're taking care of individuals groceries. They're paying utility bills. They're the boys and girls clubs helping with afternoon activities, Goodwill, providing jobs and opportunities and resources to people that desperately need help. They're doing work all the time, every single day,” he said.
The senator said that there are three safety nets in America. “The family is the first safety net. Nonprofits are our second safety net, and the government is our third. And we often look to the government to be able to solve the most difficult challenges of our safety net and people in crisis.”
“But the government is the last spot for that,” Lankford continued. “The first two are essential, and if the family collapses and nonprofits collapse, it all falls on the government, and we are not structured to be able to help maintain the needs in communities like families are.”
“Like other charitable organizations across the country, America’s Jewish institutions - from synagogues and day schools to community centers and federations - are in dire need of federal aid to survive and continue to serve people during and after the pandemic, said Nathan Diament, executive director for public policy for the Union of Orthodox Jewish Congregations of America (Orthodox Union).
“Expanding the above-the-line charitable deduction, a move that several senators have given their strong backing, will go a long way toward increasing donations and providing support for all nonprofits.”


Tags Charity tax