>> Federal: Washington Roundup
>> Federal: President Trump’s Tax Plan
>> Federal: Ways and Means Retreat
>> Federal: Private Foundation Excise Tax Simplification Act Introduced
>> Federal: Roadmap for Action
>> Federal: Philanthropic Freedom Featured in Philanthropy Magazine
>> Consider This: Bare Bones
>> Top Reads: Trump Tax Reform Save For Charities Is Illusory
Congress returned to Washington on April 24 to a potential shutdown fight and another shot at healthcare reform. On Friday, April 28 – hours before funding was set to run out – lawmakers sent a week-long funding measure to the President’s desk to allow for more time to come to an agreement. On Wednesday, May 3, the House passed another bill that funds the government through September. The Senate approved and sent the legislation to President Trump on Thursday.
After passing its spending bill, the House GOP immediately turned its attention to healthcare again. Recall that the legislation was pulled from consideration in March after House leadership was unable to gain enough conservative support to pass. Since then, they’ve been working on an amended version that curbs concerns among conservative lawmakers in the party, and came to a close compromise on Thursday, passing the legislation with 217 yes votes. Now, we expect them to turn their attention to tax reform.
On Wednesday, April 26, the White House released a tax reform outline with guiding principles. The outline included lower individual and corporate rates, an increased standard deduction, and the elimination of all deductions except the charitable and mortgage interest deductions. There was notably no cap on deductions, something President Trump originally proposed in an iteration of his tax reform plan prior to taking office.
ACR released a statement following the release that can be found here. While it’s encouraging that the President wants to maintain the charitable deduction, the increased standard deduction would reduce those who itemize their deductions from about one-third to only 5 percent. That means 95 percent of taxpayers can’t take the charitable deduction. We plan to work with the Administration and Congress over the coming months to find a way to unlock more charitable giving in tax reform, something Chairman Brady has said is one of his objectives.
Republican Ways and Means members met for a retreat on Sunday, April 30, and Monday, May 1, to work toward a consensus on tax reform with the Trump Administration and Senate Republicans. Following the retreat, Tax Policy Subcommittee Chairman Peter Roskam (R-IL) said there was already broad agreement on tax reform. There were no reports on whether lawmakers discussed charitable issues at the retreat.
Yesterday, Reps. Erik Paulsen (R-MN) and Danny Davis (D-IL) introduced the Private Foundation Excise Tax Simplification Act, which would streamline the private foundation excise tax from its current two-tiered form into a flat rate of one percent. The House has passed this provision twice as part of the America Gives More Act in 2014 and 2015. Reps. Pat Tiberi (R-OH), George Holding (R-NC), and Richard Nolan (D-MN) are original cosponsors of the legislation.
At the ACR Summit for Leaders in March, we presented a Roadmap for Action – a 12-month plan to engage with lawmakers and your community. We then hosted a webinar in April for those who may have missed the Summit. This month’s action item is to request an in-district meeting with your local Congressman. You can find all the resources you need here.
We also want to share in your successes! April’s action item was to write a letter to the editor of a local paper about charitable giving and how you are engaging in your community and with lawmakers. If you have a submission that was published and you would like to share it with us, please email it to email@example.com. Additionally, May’s action item is the perfect opportunity to snap a photo with your Congressman and share with us and on social media. Some examples of how to share on social media can be found here.
The current issue of Philanthropy, the magazine of The Philanthropy Roundtable, has two important articles on why the right of donor privacy is so important for our free society. Karl Zinsmeister writes how anonymous giving has long been central to American philanthropy. Giving by unnamed donors has made possible the building of MIT, transformation of Texas into a high-tech powerhouse, generous assistance to veterans of Afghanistan and Iraq, and much more.
In 1958, the U.S. Supreme Court ruled unanimously that the state of Alabama could not require the NAACP to reveal its donors. As Sean Parnell writes, we have filed amicus briefs in the Supreme Court and Ninth Circuit Court of Appeals to ensure that our laws continue to safeguard this historic freedom.
Like Baby Jane (Wikipedia link for our younger readers), some in Washington are starting to wonder about what ever happened to tax reform? While it appears that everyone on the GOP side is suited up and ready to take on tax reform, there just isn’t a lot of substantive activity surrounding it. Part of that is due to health care reform taking all the air in the room and part of that is there is not a widespread agreement on the big details between the administration, the House and the Senate.
Last Wednesday the administration stepped out with a tax plan (see below). One can only describe it as bare bones at best. With just 18 bullet points, it leaves more questions unanswered than answered – and it appears that the House and Senate GOP were caught a bit off guard with the administration’s announcement.
So what happens next? Now that the second iteration of the health care bill has moved through the House, we should start to learn a whole lot more. In the meantime, over 100 days of the administration has passed and there is not much to show on something that the GOP is normally reliable to agree upon – tax legislation.
The longer all this drags on in a GOP-only way and the closer we get to 2018, the tougher it will be to do broad brush tax reform because broad brush tax reform has winners – but it also has losers and the closer you get to the midterms in 2018, the less of an appetite members of Congress will have to stare down the losers.
Our very own Sandra Swirski has an excellent piece on all of the above here. Needless to say, we’ll be watching.
- National: Trump Tax Reform Save For Charities Is Illusory
- National:Initial Tax Proposal Leaves Charitable Deduction Alone
- National: Rep. Brady on tax reform: ‘We’re going to get this done this year’
- National: Trump eyes cap on charitable deductions
- National: Hatch says Congress has once-in-a-generation chance for tax reform
- National: Sen. Orrin Hatch, Trump’s tax reform ally on Capitol Hill
- National: ‘It’s a tax rip-off’
- National: Doubling standard deduction could hurt philanthropic giving
- Local: Local Voices: Trump, don’t nix deduction for charitable giving
- Local: Letter to the Editor: Are charitable deductions bad policy?
- Opinion: Charity keeps America free
- Opinion: How Philanthropy Threatens Democracy
- ACR Blog: Little evidence that foundation abuse is “common”
- ACR Blog: Dividing Philanthropy Into Favored and Disfavored Classes is a Bad Idea
Please feel free to email us at firstname.lastname@example.org if you have any questions, stories or topics you would like us to include in our newsletter.
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