Deficit Plan Would Eliminate Tax Deductions for Charitable Gifts

A high-level committee that offered a plan for reducing the federal government's debt today issued a proposal that would radically change the way the tax code treats charitable gifts.

The proposal would essentially eliminate the charitable tax deduction.

In its place, all donations made by federal taxpayers would qualify for a 15-percent tax credit. But instead of that credit going to the taxpayer, it would be given to the charity receiving the donation in the form of a matching grant from the Internal Revenue Service.