Church funding mostly comes through tithing; experts said the designation will lead many fewer people to itemize their charitable deductions

Dallin Oaks, an apostle for The Church of Jesus Christ of Latter-day Saints, testified in a Senate committee in 2011, saying that any change to the United States tax code should not lessen or eliminate the deduction for charitable giving.

“We are grateful for charitable deductions, which encourage donations to churches and other charities,” Oaks said. “The effect of this tax benefit is built into the financing of charitable enterprises that are vital to our nation, and it is a significant and wise support of the private sector.”

The GOP tax plan that passed the Senate preserves the charitable giving deduction. But by doubling the standard deduction, many fewer people are going to itemize their charitable deductions, leading to lower charitable giving, it is estimated.

But don’t expect the church to say anything about the bill now being deliberated in the House, said an LDS Public Affairs representative who asked to not be named.

“I’m pretty sure that we’re not going to take a position one way or another,” the official told me.

The Mormon church has a track record of speaking in favor of the charitable deduction both in Utah and at the federal level. Mormons are required to give 10 percent of their earnings to the church as tithing and they can express those donations as a charitable deduction when filing taxes. Tithing is the LDS Church’s chief funding resource.

The 45 million households that would itemize deductions under present statutes in 2017 would plunge to just 7 million, according to an Urban-Brookings Tax Policy Center assessment of a designation with related provisions.

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Many folks who have stopped itemizing would continue to donate, and the charitable giving deduction would could still be utilized to the portion of individuals who do itemize — who would usually be those in higher-income tax brackets. But charities are worried that contributions will cease. More than 80 percent of itemizers said they offered charitable donations, as opposed to 44 percent of non-itemizers, according to Indiana University researchers who made the assessment as directed by Independent Sector, which includes corporations, nonprofits and foundations.

To realize a long-standing commitment to morph taxes into an easier-to-understand process, the designation would cease itemization for the majority of Americans who utilize it today, by bumping up the standard deduction. Around 30 percent of taxpayers who submit tax returns presently itemize — and the idea that there will be a corresponding shift has set off a major private initiative from charitable organizations looking to ensure that the tax break is perpetuated.

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