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>> Top Reads: Sen. Orrin Hatch promises tax reform won’t be drafted in secret
Last week, Senate Republicans revealed their Affordable Care Act replacement bill, and had originally planned to hold the first procedural vote on the legislation this week. However, on Wednesday, Senate Republicans delayed their plans until after the July 4 recess. This likely means further delays of when the House and Senate will turn their full attention to an fiscal year (FY) 2018 budget, which will pave the way for tax reform.
Republican leadership and House Budget Committee Chairwoman Diane Black (R-TN) are facing obstacles as they try to tackle the FY18 budget process. House Speaker Paul Ryan (R-WI) wants to keep spending cuts proposed to a minimum, but House conservatives see the process as an opportunity to press for cuts in spending. Budget writers had hoped to release a budget blueprint this week to be marked up on Thursday, but conflict within the party about where and how much to cut made that impossible.
Keep in mind, without a budget, Republicans can’t unlock the budgetary tool known as reconciliation, which would allow them to pass tax reform without the threat of a Senate filibuster. So, the longer the budget process takes, the longer tax reform will take.
In the meantime, Ways and Means Chairman Kevin Brady (R-TX) said his committee plans to hold two hearings on tax reform following the Independence Day recess. One will focus on small business taxation and the other will focus on families and individuals. No other details have been shared, such as when the hearings will be held and if they’ll be held by the full committee or the tax policy subcommittee.
On the Senate side, Finance Committee Chairman Orrin Hatch (R-UT) is pressing ahead on tax reform as well. He has tasked some of his Republican colleagues with developing tax reform ideas in certain policy areas: Senators Rob Portman (R-OH) and Mike Enzi (R-WY) will focus on rewriting the international tax code; Senator Chuck Grassley (R-IA) will look at the individual code; Senators Bill Cassidy (R-LA) and Dean Heller (R-NV) will examine energy tax provisions; and Senator Pat Roberts (R-KS) will work on agricultural issues. Chairman Hatch has also asked for confidential tax reform feedback, and ACR plans to submit our feedback for the committee’s review.
You may recall earlier this month, Senators John Thune (R-SD) and Bob Casey (D-PA) introduced S. 1343 – the Charities Helping Americans Regularly Throughout the Year (CHARITY) Act – which includes three provisions strongly supported by the Alliance for Charitable Reform: a flat one-percent private foundation excise tax, an expansion of the IRA rollover to include distributions to donor-advised funds (DAFs), and a sense of the Senate urging Congress not to diminish the charitable deduction during tax reform. Senate Finance Ranking Member Ron Wyden (D-OR) and Senate Finance Member Pat Roberts (R-KS) are original cosponsors of the legislation, and other cosponsors include Senators Jerry Moran (R-KS), Joe Donnelly (D-IN), Gary Peters (D-MI) and Amy Klobuchar (D-MN).
Following introduction in the Senate, Reps. Mike Kelly (R-PA) and Earl Blumenauer (D-OR) introduced companion legislation in the House, H.R. 2916.
In May, Reps. Erik Paulsen (R-MN) and Danny Davis (D-IL) introduced H.R. 2386 – the Private Foundation Excise Tax Simplification Act – which streamlines the PF excise tax to a flat one percent. The bill currently has nine cosponsors in addition to the leads, including Reps. Pat Tiberi (R-OH), George Holding (R-NC), Richard Nolan (D-MN), Pat Meehan (R-PA), Kenny Marchant (R-TX), Jackie Walorski (R-IN), Tom Rice (R-SC), Mike Bishop (R-MI) and Collin Peterson (D-MN).
The ACR team continues the search for cosponsors on this legislation as well as the CHARITY Act, and we’ll keep you updated as more cosponsors are added.
On Wednesday, the Alliance for Charitable Reform co-hosted a briefing organized by the Council on Foundations and Independent Sector about the Impact of Tax Reform on Charitable Giving. The briefing featured remarks from Danny Davis (D-IL) on the importance of the charitable deduction, as well as a panel of nonprofit stakeholders who emphasized the importance of charitable giving in communities and civil society. Independent Sector also presented new research conducted by the Indiana University Lilly Family School of Philanthropy, which evaluates the potential impact of tax reform on charitable giving, as well as the potential increase in giving that would result from a charitable deduction available to all taxpayers.
On Tuesday evening, the White House announced President Trump’s plan to nominate Chris Campbell, staff director for Senate Finance Republicans, to be Assistant Secretary of the Treasury for Financial Institutions. According to Politico, Chris is expected to have a broader role than just financial regulation at Treasury, including helping with tax reform and debt ceiling negotiations.
Chairman Hatch later announced that his current policy director, Jay Khosla, will take over for Chris as staff director.
Patrick Rooney, a member of the ACR Advisory Council and an associate dean and professor at Indiana University, published an op-ed about why Congress should make the charitable deduction available to everyone. ACR and our colleagues have been calling on Congress to expand the charitable incentive to all taxpayers, and we appreciate Mr. Rooney’s thoughtful analysis of recent data that supports our efforts.
You no doubt know that Washington has reached new heights as a poisonously partisan place over the last six months. It’s a pretty grim town these days.
There are glimmers of hope however. And one of them is the bipartisan, bicameral introduction of the CHARITY Act of 2017. Led by Senators John Thune (R-SD) and Bob Casey (D-PA) and Reps. Mike Kelly (R-PA) and Earl Blumenauer (D-OR) in the House, we’re delighted that a bill with a number of our priorities in it is something policymakers on both sides of the aisle, and across the Capitol, can rally around.
The House and Senate bills contain three provisions we strongly support – a flat one-percent private foundation excise tax, an expansion of the IRA rollover to include distributions to donor-advised funds (DAFs), and a sense of the Senate urging Congress not to diminish the charitable deduction during tax reform. And we’re heartened to see that, at least in the Senate, the bills are adding cosponsors at a rapid clip.
It may be wishful thinking, but we think we may very well get these provisions across the finish line in this Congress. And, rest assured, we are doing everything we can to make that happen.
- National: Sen. Orrin Hatch promises tax reform won’t be drafted in secret
- National:Una Osili, Director of Research, Indiana University Lilly Family School of Philanthropy: An Update on Giving
- National: Five tax breaks Republicans won’t kill
- National: Tax deductions: the why behind the giving
- National: Fidelity Charitable’s 2017 Giving Report Highlights Changes and Trends in Giving
- Local: Federal, state tax changes could slow charitable giving
- Local: Preserve charitable deduction for health of Delaware nonprofit sector
- Local: Tax Changes in the 2017/2018 New York State Budget
- Opinion: More giving, more benefit for all
- Opinion: When good things come from bad people
- Opinion: The hope of private gift in a world of dysfunctional politics
- Opinion: Why Congress should let everyone deduct charitable gifts from their taxes
- ACR Blog: Carnegie Medal of Philanthropy Forum Features Roundtable Vice President Karl Zinsmeister
- ACR Blog: White Paper: Protecting Donor Privacy
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