Charity Donations Likely to Drop Next Year Due to Tax Law
WASHINGTON (AP) – In this season of giving, charity seems to be getting an extra jolt because next year the popular tax deduction for donations will lose a lot of its punch.
Traditionally generous Americans may have less incentive to give to charitable causes next year because of the newly minted tax law. The changes that will make it less advantageous for many people to donate to charity in 2018 may be sparking a year-end stream of fattened contributions in anticipation, charity executives and experts say.
Starting next year, the millions of relatively small donations from moderate-income people to mainstream charities could be sharply reduced, they say. That means charity could become less of a middle-class enterprise and a more exclusive domain of the wealthy, who tend to give to arts and cultural institutions, research facilities and universities. Their use of the charitable tax deduction is less likely to be affected by the new law.
Average Mortgage Rates Climbed This Week
WASHINGTON (AP) – Long-term U.S. mortgage rates increased this week, although they’re lower than a year ago.
Mortgage buyer Freddie Mac said Thursday that the average rate on 30-year fixed-rate mortgages rose to 3.99 percent, up from 3.94 percent last week. That average marks a five-month high, but it’s still lower than the 4.32 percent a year ago. The rate on 15-year fixed-rate mortgages increased to an average 3.44 percent from 3.38 percent in the prior week. The 15-year averaged 3.55 percent a year ago.
The $1.5 trillion in tax cuts President Donald Trump signed into law last week led to an increase in the interest charged on a 10-year U.S. Treasury note. This increase pushed up average mortgage rates.
The average on five-year adjustable-rate mortgages rose to 3.47 percent from 3.39 percent last week. A year ago, the five-year adjustable rate averaged 3.30 percent.
Cases Could Open Door to Pension Cuts for California Workers
SACRAMENTO, Calif. (AP) – For decades in California, a sacrosanct rule has governed public employees’ pensions: Benefits promised can never be taken away.
But cases before the state Supreme Court threaten to reverse that premise and open the door to benefit cuts for workers still on the job.
The lawsuits have enormous implications for California cities, counties, schools, fire districts and other local bodies facing a sharp rise in their pension costs.
The ballooning expenses are an issue that Gov. Jerry Brown will face in his final year in office despite his earlier efforts to reform the state’s pension systems and pay down massive unfunded liabilities.
His office has taken the unusual step of arguing one case itself, pushing aside Attorney General Xavier Becerra and making a pitch for the Legislature’s right to limit benefits.
At issue is the “California Rule,” which dates to court rulings beginning in 1947. It says workers enter a contract with their employer on their first day, entitling them to retirement benefits that can never be diminished unless replaced with similar benefits.
Applications for U.S. Jobless Aid Hold at 245,000
WASHINGTON (AP) – The number of unemployed workers filing for jobless benefits stayed the same from the previous week at 245,000, a low level signaling a healthy job market.
The four-week moving average, a less volatile measure, climbed 1,750 to 237,750, the Labor Department said Thursday.
Applications are essentially a proxy for layoffs, and any reading below 300,000 is considered low in a historical context. Many employers are finding it difficult to fill their open jobs, so they are motivated to retain their existing work force.
Overall, about 1.94 million people are receiving jobless benefits, an increase of 7,000 from the previous week.