"However, for churches who are struggling with giving, losing the deductability for gifts is going to hurt. It is also going to hurt food shelves, homeless shelters, just about every non-profit you can think of."
Many are thinking once the new tax law hits the street and folks start to see the consequences of it (both intended and unintended), that the first major change to the law might be forthcoming sooner rather than later. I am one of those people. However the change which I think will be forthcoming is not what some might think. Since I live in high SALT territory, some might think that would be the change. However - I think not.
Wait a minute Bird! All you have done is gripe about the SALT issue on the tax bill! What is wrong with you? Nothing. I still don't like it, as the minions in this state will be on the short end of the stick. But I also believe that the folks who live in low SALT states are not getting the same treatment from the feds that high SALT states have been given. So grudgingly, I accept that provision.
Also, I have heard many folks much smarter than I, say this change is needed so the people in the high SALT states can fix their out of control tax system. I know we sure do. I think even the bluest statist will squeal like a pig when he or she sees what happens to his or her taxes this year, if he or she continues to itemize.
No, the first change will come from elsewhere. Where elsewhere? The deductability of charitable deductions. If you don't think a whole lot of people are motivated (at least partly) by the deduction of giving, well, you might need a winter vacation. And by the way, statistics prove this out. Did you know that 13% of all charitable giving happens in the last three days of the calendar year? Coincidence? Probably not.
Here is the irony. Back in the day, when after retirement I dabbled in the church business, giving was a big problem year after year. Lutherans are notoriously low givers, no matter which denomination you are talking about. As I was mulling this one day, a thought came to me. Why is it so low, if the monies given are deductible on the income tax? Then it hit me - the deduction was not high enough. It should be a tax credit. If we gave people the choice of giving 10% to the church or 10% to the government, the churches would do very well, thank you. However, there are folks who don't believe in the church. They can continue to give that 10% to the government. Everybody wins.
One day, a few of us staff members at the large church I worked at did a "what if" exercise if during the next year, 10% of the congregation tithed. It was fantastic. The church would be paid off, the amount of missions the church could fund would multiply, and much needed church improvements could be funded.
However, for churches who are struggling with giving, losing the deductability for gifts is going to hurt. It is also going to hurt food shelves, homeless shelters, just about every non-profit you can think of. There will be a loud cry of anguish coming from the churches and non-profit world.
How loud will the cry be? It will be loud enough to be hear all the way to Washington. And that will begin the first change to this historic tax law.