President Obama’s Jobs Proposal
On September 8, 2011 President Obama unveiled his $447 billion proposal to spur job growth. The President proposes to pay for the American Jobs Act of 2011. The offsets include closing a number of corporate tax loopholes, as well as imposing a 28 percent cap on itemized deductions - including the charitable deduction - for individuals earning more than $200,000 a year and households earning more than $250,000 per year. The cap on individual deductions is expected to generate $410 billion in revenue over 10 years. Learn More.

President Obama's Deficit Reduction Recommendations
President Obama has submitted formal deficit reduction recommendations to the Joint Select Committee on Deficit Reduction. The "balanced" proposal of tax increases, spending cuts, and mandatory program changes would reduce the deficit by $3.5 trillion over 10 years and includes a 28 percent cap on itemized deductions on high-income earners.

President's FY 2012 Budget
President Obama’s FY 2012 budget outline includes proposals for tax changes for high-income earners, including a provision that would cap at 28 percent the value of itemized tax deductions for individuals earning more than $200,000 ($250,000 for families). This includes deductions for charitable donations, state and local taxes, and mortgage interest. The cap on itemized deductions is designated as a revenue raiser to pay for three years of alternative minimum tax (AMT) relief and is estimated by the White House to generate $321 billion over 10 years. This is the third time the Administration has proposed the cap, previously as an offset to costs associated with health care reform.

Independent Sector has signed onto a nonprofit coalition letter in opposition to the president's proposal to cap itemized charitable deductions at 28 percent for high-income taxpayers.

National Commission on Fiscal Responsibility and Reform
A bipartisan group of Senators, the so-called Senate "Gang of Six," consisting of Senators Mark Warner (D-VA), Saxby Chambliss (R-GA), Kent Conrad (D-SD), Richard Durbin (D-IL), Tom Coburn (R-OK), and Mike Crapo (R-ID), is preparing to release legislation in early May that that embodies the deficit reduction proposals of the President’s Commission on Fiscal Responsibility and Reform, which issued its report in December 2010. A majority on the commission proposed to eliminate the charitable deduction and give taxpayers a tax credit equal to 12 percent of their charitable donations, but only if they donated 2 percent or more of their adjusted gross income to charity. While final details are unclear, Sen. Warner has indicated that the proposal will scale back a number of tax expenditures, including deductions for charitable giving.

The Rivlin-Domenici Debt Reduction Task Force
The Rivlin-Domenici Debt Reduction Task Force issued its recommendations on November 17,2010, which includes a proposal to eliminate the charitable deduction and, instead, give nonprofits a tax credit equal to 15 percent of any donation received. The Task Force argued that this will “greatly increase the number of taxpayers who receive a subsidy for charitable donations, but will reduce the subsidy rate for upper-middle income and upper-income taxpayers who itemize.”

Blueprint for Economic Recovery and Fiscal Responsibility
Demos, the Economic Policy Institute and the Century Foundation released a joint “Budget Blueprint for Economic Recovery and Fiscal Responsibility” on November 29, 2010, which called for replacing the charitable deduction with a 25 percent tax credit for all charitable gifts, regardless of the donor's income, and available to itemizers and non-itemizers.