WASHINGTON -- President Obama has been proposing limits to the charitable deduction, selling it as one way to cut off a tax break for the rich.
But heads of charities from all over the nation told the House Ways and Means Committee on Capitol Hill Thursday that the only cutting off will be of charity to those who desperately need it.
Will Congress actually eliminate charitable deductions? Dan Busby, president of the Evangelical Council for Financial Accountability, has more, on CBN Newswatch, Feb. 14.
"Feeding hungry children, eradicating disease, building cancer centers - these aren't loopholes for the rich. These are solutions for our community," Kevin Murphy, president of the Council on Foundations, testified.
Murphy spoke of how charitable giving by the wealthy McGlinn family in his hometown has had a direct impact on him and his twin 17-year-old sons.
"They are the beneficiaries of the McGlinns' generosity in establishing the cancer center because their mother, my wife, is still alive seven years after having been diagnosed with cancer and treated at the McGlinn Regional Cancer Center," he told lawmakers.
"Cancer survivors and their families are the beneficiaries of the charitable deduction," he said.
Some 30 million to 40 million Americans use the deduction, with many of them far from being wealthy. Research shows many will cut their giving to charities if the deduction is cut.
"It's really not a tax on the wealthy as much as a transfer to government of the money that would have gone to non-profit organizations," Brian Gallagher, president and CEO of the United Way Worldwide, said.
In a nation that gives some $300 billion every year, cuts could have a devastating effect.
"Estimates are that the reduction in charitable giving could be anywhere from $5.5 to $6 billion a year just by capping the charitable deduction alone," Brent Christopher, president and CEO of the Communities Foundation of Texas, told the congressional panel.
Gallagher estimated the cost to United Way Nationwide would be $100 million.
"That's like wiping out the United Ways in Philadelphia and in Cleveland," he said.
Vinsen Faris, with Meals on Wheels, said charities like his can keep seniors and shut-ins healthier much longer, reducing costs to government programs like Medicare and Medicaid.
"People that are getting good nutrition, well-fed," Faris said. "The chances of them being admitted to the hospital or emergency room are going to be greatly reduced."
"We know that we can feed a person for a year with Meals on Wheels what it costs to pay for a day in the hospital," he said.
But government officials figure the charitable deduction costs Washington $38 billion a year, funds they're eager to utilize.