The stock market has risen 5% year to date, and that helps drive philanthropic giving more than fears over ending the charitable deduction discourage it, a U.S. Trust wealth strategies advisor told AdvisorOne.
With a slew of tax law changes taking effect in the new year, and lingering questions about ending tax expenditures like the charitable deduction as Washington comes to grips with its fiscal difficulties, many discussions about philanthropy focus on the tax angle.
“Not all deductions are created the same,” he says. “Practically speaking, mortgage interest or real estate taxes have to be paid or a bad thing is going to happen to you. But charitable donations, if you don’t make them, nobody’s going to kick you out of your house.”
Nevertheless, he adds, “if we see market growth and economic growth, that will more than offset the tax hit” of diminished middle-class discretionary spending.