title: Millions would lose mortgage, gift write-offs under U.S. tax bill: study
text: WASHINGTON (Reuters) - Millions of households would no longer benefit from federal tax deductions for charity donations, mortgage interest payments and property tax under Republican tax plans being debated in the U.S. Congress, a think tank said on Thursday. The left-leaning Institute on Taxation and Economic Policy said that up to 29 million U.S. households now writing off donations, home loan interest and state and local property tax payments would no longer be able to do so under either of the two plans. While all three deductions are maintained in some form in one or both of the rival Senate and House of Representatives bills, far fewer taxpayers could take advantage of them because of other proposed changes, said the Washington-based group. “The House and Senate have voted to fundamentally transform those write-offs in ways that most people don’t understand,” said Carl Davis, research director of the institute. Under the bills, the mortgage interest and charitable deductions would be “worthless for most people”, Davis said. “Less than one in 10 people is going to be able to write-off their donations to their churches or local nonprofits if this legislation is signed into law.” President Donald Trump and congressional Republicans are racing to complete a sweeping tax code overhaul by the end of 2017. If they can, it would represent their first major legislative achievement since Trump took power in January. Trump has promised to simplify the tax code, part of which involves ending tax breaks for special interests. That goal is encountering resistance from interests that would be hurt. The Senate and the House have approved separate tax bills and are now trying to craft one unified bill to send to Trump for his signature.  As drafted, the two bills call for roughly doubling the “standard deduction,” a key part of the tax code, to $12,000 for individuals and $24,000 for married couples filing jointly. The standard deduction is a fixed dollar amount, claimed by about two-thirds of taxpayers, that reduces taxable income. Instead of claiming the standard deduction, about one-third of taxpayers, mostly high-earning Americans, itemize deductions. Doing that is worthwhile, in most cases, if the total of itemized deductions exceeds the standard deduction. Both the Senate and House bills also curtail the deduction for state and local tax (SALT) payments, with the House preserving it for state and local property taxes up to $10,000. Tax experts estimate that the combination of doubling the standard deduction and curtailing the SALT deduction would mean that far fewer Americans would itemize. Since itemizing is the only way to claim the deductions for charity, mortgage interest and state and local tax payments, claims for those deductions are also expected to plummet, especially among middle-class Americans. The institute estimated that the percentage of U.S. households writing off charitable donations, under the Republican plans, would fall to 8 percent from 26 percent. A similar decline would be seen in households claiming the mortgage interest deduction, it said. “The mortgage interest deduction would be left in place for precisely the families who are least likely to need to the deduction to become homeowners. More than three-fourths of middle-income families claiming a mortgage interest deduction today would no longer receive that deduction,” it said.  “There are good reasons to consider reforming itemized deductions to improve their effectiveness or fairness. But the House and Senate’s approach to that task leave much to be desired,” the institute said. (The story is refiled to correct last name in second reference to Davis from David in fifth paragraph.) 