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The whole idea that giving to charity gets you a tax deduction has always been more true in theory than in practice. In general, you only get a tax benefit from charitable donations if you
itemize your deductions. Most taxpayers don’t itemize their deductions because the standard deduction is larger than their mortgage interest, state and local taxes, and charitable donations
combined. So the millions of people, working-class and middle-class households, who take the standard deduction get no tax benefit for their charitable gifts. A tax write-off, of course,
shouldn’t be high on the reasons one donates to worthy causes, but it’s a bonus and a slight motivator. RECOMMENDED STORIES When President Trump’s tax cuts doubled the standard deduction
(or, put another way, folded the personal exemption into the standard deduction), the portion of people itemizing their deductions was slashed down to about 10%. This was good because it cut
almost everyone’s taxes (by definition, everyone who was now taking the standard deduction got a bigger deduction) and because it functioned as backdoor tax reform. Less itemizing of
deductions means less spending is directed by the tax code, which means less distortion. This is why the realtor lobby really hated this tax cut. Charities, though, also worried. If fewer
people get a tax break for donating to charity, then fewer people will donate to charity, they worried. The thing is, donating to charity has a far greater claim to a tax deduction than
paying interest on a mortgage. Paying mortgage interest is paying for something you bought (credit). Donating money is giving it away. It’s as if your employer just gave the money to the
charity, and so, it’s fair that you (who don’t get to spend the money because someone else got it) shouldn’t have to pay taxes on it. And so, I thought it was great when the CARES Act
included an “above-the-line” deduction for $300 worth of charitable giving. When you do your taxes this spring, even if you take the standard deduction, you will be able to write off up to
$300 in charitable gifts, similar to how you can write off student loan interest. Congress should make this above-the-line charitable write-off permanent and bigger. In fact, for next year,
it should be $600 a person or $1,200 a couple — that is, equal to the coronavirus checks many people are getting these days. If you think you don’t need that COVID-19 relief money — say you
kept your job and even saved on commuting and vacations — then it’s an easy decision. Give it away to someone who needs it: a food bank, your church, a family aid charity. If a $600 or
$1,000 or $2,000 per-person write-off was permanently available to everyone, it might become something of a goal or a benchmark. Everyone would try to give away at least that much, just as
workers try to max out their IRA contribution limits or HSA limits. Then we’d have more money flowing to charity and, just as importantly, more people involved in charitable giving.
Democrats should like this idea because it’s a tax break only for the bottom 90% — those who already itemize wouldn’t benefit at all from it. Republicans should like it because it props up
civil society. Bipartisanship!