The massive tax cut passed by President Donald Trump and congressional Republicans in 2017 has blown a massive hole in the federal budget that is projected to lead to deficits exceeding $1 trillion starting next year.
But it’s not just the government that is expected to be starved of funds.
As Fortune reports, private charities — which Republicans usually tout as superior alternatives to government services for helping those in need — are also expected to take a hit thanks to incentives in the tax law that will likely lead to less giving.
“To gain more tax breaks via itemized charitable donations, individuals and couples need to give more than the standard deduction. But under last year’s new tax law, the standard deduction for singles nearly doubled, rising from $6,350 to $12,000,” Fortune explains. “For married couples, the standard deduction rose from $12,700 to $24,000.”
Additionally, the tax law took a hatchet to many itemized deductions, which experts say could further dampen incentives to give.
“Without itemized deductions, most people will lose all tax benefits associated with charitable giving,” Kimberly Dula, a partner at the New Jersey accounting firm Friedman LLP, explained to CNBC earlier this year.
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