The Tax Cuts and Jobs Act: How it Might Affect Hunger Relief Efforts
February 6, 2018
The Tax Cuts and Jobs Act has the potential to negatively affect not only charitable giving in general, but hunger relief efforts across Maryland. As the leading anti-hunger organization in the state, it is incumbent upon us to keep a close eye on anything that could hinder our efforts to provide food to the more than 682,000 food-insecure Marylanders in need.
With so much news and attention around the new tax law, it’s no wonder the general public and charitable organizations like the Maryland Food Bank are unclear about the impact it will ultimately have. But we have been closely following the situation, and want to share what we’ve learned so far:
Current thinking about the Tax Cuts and Jobs Act
The law is expected to add as much as $1.5 trillion dollars to the federal deficit over the next ten years. While some forecast that it will spur enough economic growth to offset the increased deficit, others believe cuts to government programs including those that provide federal nutrition and other safety net assistance will be required.
Additionally, some segments of the population are projected to get financial relief, but the legislation appears to do little to alleviate the burden of food insecurity for our most vulnerable residents.
However, a significant concern for us, and other non-profits, is this measure’s limits on itemized tax deductions. Those limits could significantly impact our ability to provide needed food assistance due to a potential drop in monetary donations.
Why are we concerned?
In FY17, more than one-third (37%) of our revenue came from individual donors (individuals, couples, and families)
The new legislation nearly doubles the standard deduction to $12,000 for individuals and $24,000 for couples, making it less likely taxpayers will itemize (which is the only way to deduct charitable donations)
In fact, the Joint Committee on Taxation (a nonpartisan committee of the United States Congress) estimates that 94% of taxpayers will utilize the standard deduction in 2018
While our supporters tend to give from the heart, the beneficial effect that their donation has on their tax situation may also be a key consideration.
How the Tax Cuts and Jobs Act Could Affect Our Programs
As previously mentioned, most experts agree that these tax cuts have the potential to drive up the federal deficit, which means the gap that remains will have to be made up in some way.
With some administration officials already starting to call for cuts to funding for critical social safety net programs that help many of our food-insecure neighbors put food on the table, we’re concerned about the impact these threats may have on our efforts to continue to meet their needs.
If Congress slashes Supplemental Nutrition Assistance Program (SNAP) and/or other social safety net programs, we’ll see even more people who need help from organizations like the Maryland Food Bank – just as our ability to raise money is compromised.
Of course, it’s too early to really understand the full implications of this new tax plan, but what we do know is that we need your help more than ever.
We will continue to monitor the situation, evaluate its impact, and do everything we can to protect the federal (and other) nutrition programs we know help Maryland families access the resources and nutrition they need to succeed.
To help us ensure that we will be here when our hungry neighbors need us, make your gift now.