WASHINGTON -- Part of the debt-reduction plan unveiled Tuesday by the Gang of Six would "reform, not eliminate tax expenditures" for charitable giving.
The plan says nothing more about charitable tax deductions, which it lumps in with reforms in health, home ownership and retirement.
Asked what "reform" meant, Senate Budget Committee spokesman Stu Nagurka emailed The Huffington Post, "I don’t have any information that I can share with you."
That being said, an executive summary of the proposal gives a hint at the approach to reform, saying it is "consistent with the recommendations of the Bowles-Simpson fiscal commission." The document called for simplifying the tax code while increasing or maintaining fairness.
Under the current system, taxpayers who donate to charities are eligible for a deduction based on their marginal tax rate. Those in the top bracket currently are allowed to deduct a maximum of 35 percent of their taxable income. Those with more modest incomes get more modest deductions.
The federal debt commission proposed late last year that all taxpayers be given a 12 percent, non-refundable tax credit as long as they contributed at least 2 percent of their adjusted gross income to charity. If they give less than that, they would get no deductions.
Charitable deductions are estimated to cost the federal government about $237 billion between 2009 to 2013.
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