Jun 18, 2019

Charitable giving declined in 2018 thanks in part to the GOP tax overhaul

Former House Speaker Paul Ryan and President TRump. Photo: Alex Wong/Getty Images

Charitable donations in the U.S. dropped an inflation-adjusted 1.7% to $427.7 billion in 2018, the first overall drop since the Great Recession, according to Giving USA's annual report.

The big picture: Giving by individuals dropped an inflation-adjusted 3.4% to $292 billion as a result of changes in the federal tax law and a dip in the stock market late last year, despite an overall strong economy, the Wall Street Journal reports. Giving by individual Americans had previously grown for four straight years by at least 2.4%. In 2017, U.S. giving exceeded $400 billion for the first time.

The new GOP tax law increased the standard deduction and thereby reduced the number of Americans who could benefit by itemizing their deductions — thus diminishing the "direct federal incentive" to donate to charity, according to the Journal.

  • The number of households expected to use the deduction dropped from 37 million to 16 million after the tax rewrite, according to the Tax Policy Center
  • "Households earning more than $1 million per year nearly always itemize," Axios' Felix Salmon wrote in November. "They accounted for 30% of itemized charitable donations in 2015; expect that number to rise even further."

The bottom line: "Donations tend to rise when the economy and stock market are strong and when natural disasters occur," which wasn't the case this year, WSJ's Richard Rubin writes.

Go deeper: National deficit grew 20% last year, partially due to Trump tax cuts

Go deeper

Grassley to hold up pair of nominations until Trump explains IG firings

Grassley questions Former Deputy Attorney General Rod Rosenstein on June 3 in Washington, D.C. Photo: Greg Nash-Pool/Getty Images

Sen. Chuck Grassley (R-Iowa) said on Thursday that he will block the confirmation of two of President Trump's nominees until the White House provides "adequate explanations" for why the inspectors general for the intelligence community and State Department were ousted in the past two months.

Why it matters: It's a rare attempt by a Republican to hold Trump accountable for his recent purge of federal watchdogs. Grassley has long considered himself a defender of inspectors general.

John Kelly defends James Mattis against Trump attacks

John Kelly in the White House in July 2017. Photo: Cheriss May/NurPhoto via Getty Images

Former White House chief of staff John Kelly defended James Mattis on Thursday after President Trump attacked the former defense secretary as "the world's most overrated general" and claimed on Twitter that he was fired.

What he's saying: “The president did not fire him. He did not ask for his resignation,” Kelly told the Washington Post in an interview. “The president has clearly forgotten how it actually happened or is confused."

Barr claims "no correlation" between removing protesters and Trump's church photo op

Attorney General Bill Barr said at a press conference Thursday that there was "no correlation" between his decision to order police to forcibly remove protesters from Lafayette Park and President Trump's subsequent visit to St. John's Episcopal Church earlier this week.

Driving the news: Barr was asked to respond to comments from Defense Secretary Mark Esper, who said Tuesday that he "did not know a photo op was happening" and that he does everything he can to "try and stay out of situations that may appear political."