Center for American Progress

RELEASE: State-by-State Analysis Shows Tax Plan Would Devastate Charitable Giving
Press Release

RELEASE: State-by-State Analysis Shows Tax Plan Would Devastate Charitable Giving

Washington, D.C. — New analysis by the Center for American Progress finds that congressional Republicans’ plan to eliminate the estate tax would reduce the amount that people give to charities in their wills by $7.8 billion in 2024.

CAP estimates that giving through wills to health-related charities such as the American Cancer Society would decline by $650 million in 2024, while giving through wills to religion-related charities—including local community houses of worship such as mosques, synagogues, and churches—would decline by $2.5 billion in 2024.

“President Donald Trump and congressional Republican leaders are not only giving billions in handouts to the very wealthiest—increasing inequality and perpetuating a group of superrich Americans—they are doing it at the expense of charities and help local organizations that feed the homeless, tutor children, and provide job training to veterans. These programs and services are the backbones of communities, and repealing the estate tax would further devastate their budgets, making it impossible for them to serve Americans in need,” said Katherine Gallagher Robbins, director of family policy for the Poverty to Prosperity Program at CAP.

Currently, wealthy individuals are incentivized to leave money to charity in their wills partly because these donations are tax-free, whereas leaving money to their heirs requires the estate pay taxes on amounts greater than about $5.5 million dollars for an individual or $11 million for a couple—amounts that would double under the House Republican tax plan.

Charitable donations from an individual’s estate, also known as charitable bequests, accounted for 8 percent of charitable contributions in 2016, providing more than $30 billion to a variety of causes. The Congressional Budget Office (CBO) estimates that eliminating the estate tax could reduce charitable giving through wills by between 16 percent and 28 percent—and other studies have found even larger effects. When the estate tax was temporarily repealed in 2010, charitable bequests declined by 37 percent.

The impacts would be felt in every state. CAP’s new state-by-state analysis shows that in charitable giving through wills alone, the wealthiest West Virginians would give $26 million less in 2024, while extremely wealthy people in Maine would give $37 million less.

Click here to read “Repealing the Estate Tax Would Plunge Charitable Giving” by Katherine Gallagher Robbins, Rachel West, and Melissa Boteach

For more information or to speak with an expert, please contact Devon Kearns at [email protected] or 202-741-6290.