Rep. Kevin Brady, the Republican responsible for writing tax legislation in the House, hinted Wednesday that the deductions for charitable giving and mortgage interest could be changed and possibly enlarged in the Republican tax reform proposal.
Those provisions are the two that were set aside and spared in the GOP tax reform framework. At the same time, though, both would be undercut by the Republican plan to double the standard deduction, because that move means less people would benefit from itemizing specific deductions, rendering the charitable giving and mortgage deductions inoperative for more people.
Speaking at the Baker Institute in Houston, Brady said that the committee is trying to “think fresh” about maintaining incentives for charitable giving and homeownership in the GOP bill.
“We are exploring the home mortgage deduction, and charitable, and looking at ways perhaps we could extend it across the economy, not just for those who itemize it,” Brady said. “Perhaps allow it to be used for all phases of homeownership.”
Support or opposition from the housing sector could hinge on the tax-writers’ ability to draft legislation that encourages home purchases. Several different options for doing so could be in consideration.
Meanwhile, charities, churches, and nonprofits have been lobbying for the deduction for charitable giving to be converted to an “above-the-line” deduction, meaning that it would be available to all taxpayers, whether or not they itemize deductions. Doing so would incentivize more giving, but also lose more revenues, creating a challenge for Republicans as they try to minimize the fiscal cost of the bill.
