16 September 2016

ACR News 9-16-16: Trump Proposes Cap on Charitable Deduction

>> ACR Alert: Trump Proposes Cap in Latest Tax Plan
>> Federal: Washington Roundup
>> Federal: Nonprofits in the News
>> Consider This: Governing Through Regulation
>> Top ReadsDetails of the Donald Trump Tax Reform Plan, September 2016

ACR Alert: Trump Proposes Cap in Latest Tax Plan

Presidential candidate Donald Trump released a revised tax reform plan, which appears to include a cap on all deductions including the charitable deduction.

ACR released the following statement on the new plan.

“We are surprised and disappointed that Mr. Trump caps the charitable deduction in his most recent tax reform proposal. Cuts, caps and limitations on the deduction mean less money for charities and those they serve. That can’t be what Mr. Trump intends,” said Sandra Swirski, executive director of ACR. “The charitable deduction is not a loophole, it’s a lifeline.”

Trump’s first tax reform proposal, which was released in September 2015, preserved the current charitable deduction. This iteration of Trump’s plan would appear to cap all itemized deductions—including the charitable deduction, mortgage interest deduction, and state and local taxes paid—to $100,000 for individuals and $200,000 for couples. This provision hits exactly those donors that account for the bulk of individual giving.

“We reiterate our call for Mr. Trump to preserve the full scope and value of the charitable deduction. It is unique among all other credits and deductions because it encourages individuals to give away a portion of their income for the benefit of others. The donor is a dollar poorer while independent civil society is strengthened,” Swirski said.

The details of Trump’s revised plan can be found here.

Washington Roundup

In addition to the recent release of a new tax plan from Donald Trump, the House and Senate were in session this week, though it’s unclear when Members will leave town for the final weeks of campaigning. As of now, the Senate is expected to vote next week on a measure that would fund the government through December 9 and then return to their home states until the election, setting up yet another year-end spending battle.

On Tuesday, September 13, the House Ways and Means Subcommittee on Oversight held a hearing on tax-exempt college and university endowments. The Members and witnesses stuck closely to university-specific endowments, and Rep. Danny Davis (D-IL) noted that trying to change the treatment of these endowments in the tax code could hurt other endowments, namely those held by private foundations.

Tax reform has largely been on the back burner in Congress while most of the country’s attention has remained on the elections. Following the release of the House GOP blueprint back in June, Speaker Paul Ryan (R-WI) and Ways and Means Chairman Kevin Brady (R-TX) tasked the committee staff with developing legislative language that details the high-level concepts contained in the blueprint, which is expected to be done over the remainder of the year. Protecting the charitable sector is our top priority, so we are staying in contact with staff to be sure our opinion is counted.

Should there be a year-end tax bill, as has happened in years past, we are prepared to urge lawmakers to include provisions important to the sector, including the streamline of the private foundation excise tax and the expansion of the IRA rollover to include distributions to donor-advised funds (DAFs). We are tentatively going to hold a fly-in the first week in December to make a final push for our priorities, and we hope leaders in the sector will join us.

Nonprofits in the News 

We thought you might enjoy reading…

The case for philanthropic freedom – Former senior vice president for The Philanthropy Roundtable, Joanne Florino, makes the case for philanthropic freedom while also outlining the attacks on the sector through regulation, lack of privacy, and mandated activity.

Nonprofits go on offense – Joseph Lawler writes in the Washington Examiner about the challenges facing the nonprofit sector, including those because of election politics.

Clinton and Ryan insiders brace for impasse – Edward-Isaac Dovere of Politico analyzes the potential dicey relationship between Speaker Ryan and a President Hillary Clinton, particularly given his 2020 presidential aspirations.

Consider This – Governing Through Regulation

In the dog days of August – August 14 to be exact – the New York Times published a lengthy and fascinating piece titled, “Once Skeptical of Executive Power, Obama has Come to Embrace It.” You might have missed it given the timing (we did initially) but it’s pretty important because it will be fascinating to see if presidents to follow will embrace this new way of essentially governing through regulation.

The basic premise of the Times piece is this – stymied by Congress, President Obama has turned to regulations on topics as wide-ranging as mandating rearview cameras in cars to protecting home health aides. Our sector is indeed familiar with this new way of governing – overtime rules for nonprofits go into effect on December 1 of this year. And while Republicans in Congress have been none too pleased about these developments, they’ve discovered there is not a lot they can do about them.

The Times article notes that by operating this way, the President “created the kind of government neither he nor the Republicans wanted – one that depended on bureaucratic bulldozing rather than legislative transparency.”  The question is, will this become the new way of doing things in DC?  Only time will tell under President Clinton or President Trump.  In the meantime, there are another 50-odd days in this Administration so odds are we will be seeing more of the same.

Top Reads

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