Unfavorable
Committee: Budget & Taxation
SB0321
The Maryland Catholic Conference offers this testimony in OPPOSTION to the increase of the standard deduction and the elimination of itemized deductions proposed in the Budget Reconciliation and Financing Act, Senate Bill 321. The Catholic Conference is the public policy representative of the three (arch)dioceses serving Maryland, which together encompass over one million Marylanders. Statewide, their parishes, schools, hospitals and numerous charities combine to form our state’s second largest social service provider network, behind only our state government.
The MCC is deeply concerned about the unintended consequences this change will have on charitable giving and the many organizations that serve our communities.
Charitable giving is not merely a financial transaction, it is an expression of our shared moral responsibility to care for the poor, the vulnerable, and those in need. Catholic social teaching calls us to solidarity and the preferential option for the poor, recognizing that human dignity is upheld when we work together to support those who are struggling. Faith-based and non-profit organizations play a vital role in meeting the needs of our communities, offering food, shelter, education, and support to countless individuals and families.
Research from the Tax Policy Center (1) has shown that when a similar policy was enacted at the federal level, charitable giving declined significantly. By eliminating itemized deductions, this proposal would disincentivize charitable donations, reducing the resources available to faith-based ministries, homeless shelters, food pantries, and other essential services that many rely upon. At a time when economic hardship persists for many, we should be encouraging greater generosity, not making it more difficult for people to give.
Catholic teaching affirms the principle of subsidiarity, which holds that needs should be met at the most local level possible. Charitable organizations and religious institutions are often best positioned to provide direct assistance efficiently and compassionately. However, their ability to do so depends on the generosity of donors who, under the current system, can choose to claim their contributions as itemized deductions. Removing this incentive will weaken the financial foundation of these organizations and ultimately shift the burden to government programs, which are already strained.
While the intention of increasing the standard deduction may be to provide financial relief, it should not come at the expense of charitable giving and the ability of civil society to care for those in need. I urge you to consider policies that encourage generosity and maintain the incentive for charitable contributions, ensuring that faith-based and non-profit organizations can continue their critical work.
The MCC urges this committee to reject the proposal to increase the standard deduction and eliminate itemized deductions in SB 321.
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(1) How did the TCJA affect incentives for charitable giving? | Tax Policy Center: https://taxpolicycenter.org/briefing-book/how-did-tcja-affect-incentives-charitable-giving