[Congressional Record (Bound Edition), Volume 147 (2001), Part 2]
[Extensions of Remarks]
[Page 2524]
[From the U.S. Government Publishing Office, www.gpo.gov]



        INTRODUCTION OF THE CHARITABLE CONTRIBUTIONS GROWTH ACT

                                 ______
                                 

                          HON. PHILIP M. CRANE

                              of illinois

                    in the house of representatives

                      Wednesday, February 28, 2001

  Mr. CRANE. Mr. Speaker, today I am introducing legislation to help 
our charitable organizations and promote fairness in our tax code by 
encouraging charitable giving. This is one of three bills I am 
introducing today to correct certain peculiarities in the tax code that 
discourage charitable giving.
  Many taxpayers today contribute to charitable organizations out of 
the goodness of their hearts and in the expectation that they will not 
be subject to federal income tax on their gifts. However, in some cases 
taxpayers suffer a reduction in the amount of their charitable 
deductions. For example, under current law itemizing taxpayers with 
incomes above a certain threshold ($128,950 this year for a married 
couple filing jointly) suffer a phase-down in the total amount of 
charitable contributions they can take. The phase-down is at the rate 
of 3 percent of their itemized deductions for every $1,000 over the 
threshold, up to a total in lost deductions of 80 percent. Thus, a 
taxpayer making a $10,000 contribution and subject to this phase-down 
could lose up to $8,000 in charitable deduction. This is part of the 
itemized deduction ``haircut'' administered as part of the 1986 Tax 
Reform Act.
  Obviously, most individuals give to charity because the act of 
charity is a blessing for both the giver and the receiver. It is hard 
to imagine the individual who gives for the purpose of getting a tax 
deduction. Nevertheless, taxes can affect the amount an individual is 
willing to give. When the tax burden overall increases, individuals 
have less discretionary income and thus less income to give to charity. 
And when the effective price of charitable giving rises, which is 
exactly the consequence of the phase-down in itemized deductions, there 
is a disincentive to give.
  The legislation I am introducing today is very simple. It excludes 
from the itemized deduction ``haircut'' all qualified charitable 
contributions. Qualified medical expenses, certain investment interest 
expense, and deductions for casualty losses already receive this 
treatment. Certainly charitable contributions should be treated no 
worse.
  This legislation is good social policy because it provides 
additional, private resources to charitable organizations. It also 
helps to develop the strength of our social fabric by encouraging more 
individuals to become involved in their communities through charitable 
organizations. In many instances, individuals first become involved 
through financial contributions before applying their personal time, 
energy, and creativity.
  This legislation is also good economic policy because charitable 
organizations help to build up those on the paths to success while 
acting as an effective safety net to those in trouble or need. As 
welfare reform has taught us abundantly, given the right incentives and 
the proper assistance, almost every individual can evolve from being a 
ward of society to being a productive member.
  And this legislation is sound tax policy. Whether we have an income 
tax or a consumption tax, one principle remains clear and unchanging. 
No one should be taxed on property given to someone else.
  This legislation is an important step toward increasing the resources 
of our charitable organizations. I hope my colleagues will join me as 
co-sponsors. I hope President Bush will endorse this legislation as 
part of his faith-based program. And I hope it can find its way to his 
desk this year for his signature.
  Charity benefits both the giver and the receiver in like proportions. 
The act of giving elevates the heart of the giver. The act of receiving 
elevates the condition of the recipient. Charity is thus a blessed act 
that should suffer no discouragement from something so mean as the tax 
code.

                          ____________________