News and Views
CPA Journal, August 2018
I read with interest the article “First Look at the Tax Cuts and Jobs Act: Impact on Individual Charitable Giving” in the April 2018 issue (Mark A. Nickerson, http://bit.ly/2LidMOZ), and I congratulate Mr. Nickerson on the analysis of the factors the promote and impede individual charitable giving, especially under the Tax Cuts and Jobs Act of 2018 (TCJA). The analysis, however, bases its conclusions on past behavior, which in turn is founded on prior tax law that is mostly no longer in effect. For example, Nickerson posits that reduced withholdings will create more disposable income, which in turn increases the likelihood of charitable giving. This, however, would only be true under the pre2018 tax laws; under the TCJA, there is currently a disincentive to spend disposable income on charity because of the reduced personal benefit. In other words, the cited correlation is no longer as strong as in the past. We should then expect that, starting in 2018, individual taxpayers will be more likely to spend the money on personal wishes, not charitable donations.
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