Under our current tax code, only taxpayers in the highest tax brackets are encouraged to give back. This system establishes an unfair correlation between wealth and one’s ability and desire to give back, when in fact all Americans want to have an impact on their communities.
On July 26, 2018, the Everyday Philanthropist Act (H.R. 6616) was introduced to the House of Representatives by Congressman Erik Paulsen (R-MN) and cosponsored by Representatives Mark Pocan (D-WI), Mike Gallagher (R-WI), Cheri Bustos (D-IL), Tim Walberg (R-MI) and Ami Bera (D-CA). The Act seeks to empower everyday, working Americans to give to charity. As the primary backer of this bipartisan legislation, The Greater Give believes this is the first step in redefining the way America gives back by creating a whole new class of the Everyday Philanthropist.
The Everyday Philanthropist Act would empower Americans to give with a Flexible Giving Account (FGA). An FGA is a pre-tax payroll deduction for employee giving. Eligible employees would set up an FGA through their employer, set aside part of their paycheck pre-tax to donate to a charity of their choice, and immediately see their taxable income reduced.
Currently, only itemizers — those typically in the highest tax brackets — receive tax benefits for charitable giving. This leaves out a large percentage of American taxpayers who want to give back to their communities. About 70% of taxpayers are non-itemizers, but under the new tax law that number could rise to 95%, meaning that the majority of everyday, working Americans are not being afforded the same benefits for giving.
The Greater Give believes ALL working Americans deserve the same opportunity to lower their taxes by giving back.
With an FGA, millions more Americans would be empowered to give back, allowing us to dramatically increase America’s charitable donations. The legislation has already garnered public support by many in the charitable sector such as Community Health Charities, America’s Charities, and Wisconsin Philanthropy Network.
This legislation would revolutionize the way America gives back by:
- Empowering the Everyday Philanthropist to give back.
- Increasing charitable donations, so nonprofits can more effectively impact the communities they serve.
- Enabling employers to enhance CSR efforts while lowering their own payroll taxes.
The Everyday Philanthropist Act is a win for taxpayers, employers, charities, and Congress.