Why Trump’s tax plan would mean less money for churches

Taxes in America are complicated enough that fiddling with them is bound to have unexpected consequences. And although President Trump has promised to simplify the system, his proposals could also result in fewer contributions to churches — including many of his political allies.

GOP tax proposals could reduce donations to congregations by nearly 5 percent, a new, nonpartisan analysis has found. Although the Trump administration has said it will protect the deduction for contributions to churches and other charities in any overhaul of the tax system, other proposals Trump has advanced would combine to make giving more expensive.

Earlier this month, Trump signed an executive order to give churches financial protection from tax authorities, but any legislation he signs would likely have a much more serious effect on the finances of congregations of all faiths.

The result could be financial trouble not only for the collection plate but also for a wide variety of other charitable organizations — community clinics, symphonies, food banks, universities and more.

“A lot of charities are run on pretty slim margins, so if you take a 5 percent hit, that’s pretty significant,” said Patrick Rooney, an economist at Indiana University’s Lilly Family School of Philanthropy, which published the report Thursday.

The charitable deduction, which allows taxpayers who make donations to reduce their tax bills, has been part of the U.S. tax system for 100 years. Americans donated an estimated $373 billion in 2015, and more than half of the money contributed goes to congregations (excluding religious schools, hospitals and similar organizations), according to Rooney.

Trump’s plan would reduce the financial appeal of the charitable deduction in a couple of ways. First, the plan would increase the standard deduction,…

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