PEP, Pease, and Worship

In the 1990’s limits on tax-deductions known as PEP and Pease were part of a budget deal. Specifically, they limited the percentage of charitable giving and other deductions that could be itemized on your tax return. PEP and Pease were in effect for a decade before being eliminated in 2001 tax cuts.

With the “fiscal cliff” deal, Pease is back in 2013, at least for higher income people. So if you make $250,000 per year (singles) or $300,000 (married couples) there will be a cap on how much of your charitable giving can be itemized and deducted on your tax return. Here is a quick explanation and example of how it works.

 …the Pease limitation reduces a household’s itemized deductions by 3% of the amount over the threshold. The reduction can’t exceed 80% of the total deductions.

A couple with income of $400,000 average about $50,000 in itemized deductions, according to IRS statistics. Because their income would exceed the $300,000 threshold by $100,000, their allowed deductions would be reduced by about $3,000 to $47,000—potentially boosting their tax bill by about $1,000.
(from Deduction Limits Will Affect Many by John D. McKinnon  in The Wall Street Journal, January 2, 2013).

The return of Pease will give some opportunity to rail against tax increases. Others will give thanks that taxes have increased, especially on people many consider wealthy. Still others will fret about the effect Pease might have on charitable giving. Some may even vow to stop their charitable giving. While I have little interest in the politics of all this, I am very interested in people of faith taking opportunity to examine our motivation for giving, particularly to church, but other charitable giving as well.

Back in the 80’s a friend of mine named Dennis told me that he did not itemize his church contributions. He explained that he did not feel right about benefiting from what he was giving to God. We looked at passages like Malachi 1 in which the prophet rebuked the people of God for giving God blemished sacrifices. Dennis asked, “What kind of ‘giving’ is it when we give God what costs us nothing?” After we finished our conversation, Dennis decided the best approach would be to itemize his church contributions, calculate how much that deduction benefited him, and donate the refund amount generated by the itemized deduction. I appreciate his intentions.

So as political rhetoric rages, I want to encourage people of God to give their first fruits to God as they have been prospered, give generously to those in need, and to do it all to worship Almighty God, not for a tax break.

Preparing for Worship

Each week we have opportunity to worship God by giving money to support kingdom life and work. As we prepare to give this week, consider the following words from Francis Chan in his book, Crazy Love. The words are from a chapter in which he describes what lukewarm Christians look like.

“Lukewarm People give money to the church as long as it doesn’t impinge on their standard of living. If they have a little extra and it is easy and safe to give, they do so. After all, God loves a cheerful giver, right?”
page 69

Prepare to give by praying about these two passages.

The first is a verse that describes David’s reaction when Araunah offered to give him something to sacrifice to God —

1 Chronicles 21:24 NLT
“But King David replied to Araunah, ‘No, I insist on buying it for the full price. I will not take what is yours and give it to the Lord. I will not present burnt offerings that have cost me nothing!'”

The second is a passage that describes the worship of a widow as she worships God, not by giving him leftovers, but money from what she had to live on.

Luke 21:1-4 MSG
“Just then he looked up and saw the rich people dropping offerings in the collection plate. Then he saw a poor widow put in two pennies. He said, ‘The plain truth is that this widow has given by far the largest offering today. All these others made offerings that they’ll never miss; she gave extravagantly what she couldn’t afford-she gave her all!'”

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God our Father,

Help our love for you grow to the point that we want to give, not just money that we will never miss, but money that we “need” for something else.

Help us learn the meaning of giving to You “off the top.”

Help us learn the meaning of giving to You “sacrificially.”

Fiorgive us when we bring You gifts that cost us nothing, gifts that we will never miss, gifts that are simply a bit of our leftiovers.

Teach us, O God, to give.

In the name of Jesus, the One who gave all,
AMEN.