Mirror of Justice

A blog dedicated to the development of Catholic legal theory.
Affiliated with the Program on Church, State & Society at Notre Dame Law School.

Tuesday, December 22, 2020

A Tax Policy for the Common Good

I recently published a short essay at Public Discourse about the need to extend the above-the-line charitable tax deduction. This is, admittedly, a rather small policy issue that many people overlook. The deduction means that a tax filer making $300 in charitable gifts ends up generally paying $30-$70 less in federal income taxes.

As mentioned in my essay, however, not having an above-the-line charitable tax deduction would actually prove quite unfair to taxpayers and nonprofit organizations that are religious in nature. This is because higher income earners generally give to more secular causes (such as the arts and wealthy universities), and those taxpayers will seemingly always have the charitable tax benefits that come with itemizing. As documented in a 2019 report by Senator Mike Lee and the congressional Joint Economic Committee, lower income earners (rarely itemizing their taxes) are more likely to give their charitable dollars to organizations that are religious in nature, and to nonprofits that directly help those in need in their local communities. 

Interestingly, the new Coronavirus Relief bill extends the above-the-line option into the 2021 tax year. In fact, the new bill actually doubles the tax benefit for married couples filing jointly, meaning that a married couple can claim an above-the-line deduction of up to $600 in 2021. I think this is a common sense policy move that will inspire more Americans to give to worthy causes.


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