Liberal Deficit-Cutting Plan Proposes New Charitable Tax Credit

Three liberal groups have offered a new proposal on how to cut the federal deficit, proposing yet another way to change the charitable deduction.

The proposal—by the Century Foundation, Demos, and the Economic Policy Institute—suggests converting the federal income-tax deduction for charitable donations to a 25-percent tax credit. The credit would be available to all federal taxpayers, including those who don’t itemize or owe any income taxes.