Federal Legislation
By Diane Freda
The charitable contribution deduction is the only deduction that would be allowed under the Buffett rule tax proposed by Sen. Sheldon Whitehouse (D-R.I.), in legislation that would ensure that millionaires pay a minimum effective 30 percent tax rate, charitable sources told Bloomberg BNA Feb. 2.
“The legislation builds on what the president’s blueprint stated, which was that the administration is going to impose the [Buffett rule tax] on individuals with certain high incomes, but is going to hold harmless their contributions to charity,” Sandra Swirski, executive director of the Alliance for Charitable Reform, said.
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WASHINGTON, D.C.— In announcing “The Paying the Fair Share Act”, a proposal for a new tax on high earners put forth by 8 Senate Democrats, the charitable deduction was specifically preserved, signaling that incentives for private giving should not be used as a revenue offset for competing priorities.
“ACR believes that our tax code should encourage and incentivize private charitable giving. We appreciate the wide recognition that the charitable deduction is different from all other deductions in that it is an incentive for Americans to give away their money as compared to other deductions and credits. However, ACR also believes that encouraging entrepreneurship and the creation of wealth is vital to sustaining charitable giving and a surtax on high income earners could hinder this goal. We are hopeful Congress and the Administration can come together and create a proposal that accomplishes all of these goals to promote more philanthropy,” said Sue Santa, senior vice president of the Philanthropy Roundtable.
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NEWS
President’s State of the Union Address
1.27.12 - Bloomberg BNA reports that The Obama Administration may be stepping back from its former proposal to cap charitable deductions at 28 percent despite a proposed increase to their incomes taxes.
ACR signs onto letter defending the charitable deduction
12.15.11 - Today, ACR and The Philanthropy Roundtable joined a coalition other nonprofit organizations across the country send a letter to Senate Finance Chairman Max Baucus reminding him of the importance of the charitable deduction during this giving season. Click here to learn more
RESOURCES
Following are resources that provide background on efforts at the federal level to impact the charitable giving.
News
News stories we have highlighted and find of interest.
- 1/25/12 President Vows Not to Deter Wealthy From Giving, Chronicle of Philanthropy
- 1/24/12 Obama Lays Out Policy Proposals, Wall Street Journal
- 1/9/12 Nonprofit Views Offered by the Republican Presidential Contenders, Chronicle of Philanthropy
- 11/22/11 ‘Super Committee’ Breakdown Could Hurt Nonprofits, Chronicle of Philanthropy
- 11/20/11 Nonprofits Worry They’ll Take a Hit in Debt-reduction Proposals, Washington Post
- 11/1911 Charitable organizations struggle with how tax law changes will affect donations, Palm Beach Daily News
- 11/18/11 Secretive ‘Super Committee’ Gives Nonprofits a Super Headache, Chronicle of Philanthropy
- 11/17/11 Charitable Deduction Faces a Fresh Challenge as Lawmakers Attempt to Close Deficit, Chronicle of Philanthropy
- 11/17/11 GOP deficit reduction plan limits itemized tax deductions, health insurance tax breaks, New York Times
- 11/11/11 Charitable Deduction Not Discussed at Deficit Talks, Chronicle of Philanthropy
- 11/7/11 G.O.P. Talks of Limiting Tax Breaks, New York Times
- 10/26/11 Obama Tax Plan Would Have ‘Modest’ Impact on Giving, New Study Finds, Chronicle of Philanthropy
- 10/20/11 New Study Says Charities Could Lose Up to $3.2-Billion From Obama Tax Change, Chronicle of Philanthropy
- 10/18/11 Hatch Cites Impact on Charities if Tax Write-off is Cut, Washington Times
- 10/18/11 Hatch Urges Obama to Drop Plan to Cap Charitable Deductions, Bloomberg Business
- 10/18/11 Mormon Apostle to Senate: Keep charitable deductions, Salt Lake Tribune
- 10/7/11 Charitable Deduction Cap Pulled From Bill, NonProfit Times
- 9/29/11 19 Major Nonprofits Lobby To Keep Charitable Deductions, The NonProfit Times
- 9/27/11 A Cap on Tax Benefits for Donations in Obama’s Jobs Proposal Worries Nonprofits, Denver Post
- 9/23/11 Obama Scrambles Charities, Wall Street Journal
- 9/19/11 Arts groups worry about Obama’s plan to cut tax breaks for wealthy, Washington Post
- 9/15/11 Soak the Rich? No, Soak the Needy, Wall Street Journal (Fay Vincent)
- 9/15/11 Nonprofits Fight Proposal to Curb Charity Tax Breaks, Chornicle of Philanthropy
- 9/14/11 Lukewarm Response for Jobs Bill Payment Plan, Roll Call
- 9/13/11 Why Obama’s Jobs Bill Could Be Bad for Charity, Wall Street Journal
- 9/13/11 Obama’s Jobs Bill Includes Plan to Limit Charitable Deductions for the Wealthy, Chronicle of Philanthropy
- 9/12/11 White House Would Cut Deductions to Pay for Its Jobs Plan, New York Times
- 9/2/11 Campaign Urges Obama to Include Nonprofits in Jobs Plan, Chronicle of Philanthropy
- 8/1/11 Charitable Deduction Not Touched in Debt-Ceiling Deal, Chronicle of Philanthropy
- 7/24/11 Charity Groups on Edge over Possible Trim to Deductions, DelawareOnline (The News Journal)
- 7/22/11 Charities Can’t afford to Sit Out tax and Budget Debates, Chronicle of Philanthropy
- 5/4/11 Key Senator Asks Whether Charity Tax Break Is Fair to All, Chronicle of Philanthropy
- 4/29/11 Changing the Charitable Deduction Could Discourage the Most-Generous Donors, Chronicle of Philanthropy
- 4/29/11 Charity Tax Break Becomes Target, Minnesota StarTribune
- 3/27/11 Tax Break for Charitable Giving Targeted, The Hill
- 2/17/11 Charitable Deduction Cap is Ill Advised, Huffington Post
- 2/14/11 Budget Plan Brings Big Changes to Tax Incentives for Donors, Chronicle of Philanthropy
- 2/7/11 Q&A With Aaron Dorfman, National Committee for Responsive Philanthropy, PND News
- 1/26/11 A New Big Idea: Create Jobs And Reduce Poverty By Doubling The Charitable Deduction, Huffington Post
- 12/2/10 Nonprofits Fear Loss of Charitable Tax Deduction, New York Times
- 11/28/10 Charitable Deduction Under Scrutiny, Chronicle of Philanthropy
- 5/7/10 The Cost of Taxing Nonprofits, Huffington Post
- 5/6/10 John Thune Begins to Raise His National Profile, Washington Post
- 4/26/10 Charities Fear Tax Plan will Stifle Donations, Los Angeles Business Journal
- 8/7/09 Washington Update: Charitable Deduction and Social Innovation Fund, Chronicle of Philanthropy (Audio Interview)
- 2/26/09 Obama Plan Would Reduce Charitable Deduction for Some Wealthy Donors, Chronicle of Philanthropy
Research
Studies, reports and polling information on the impact of changes to the charitable deduction from a variety of sources.
- Academic
Government
Think Tanks
Polls
Administration Proposals: President Obama has proposed limiting the charitable deduction for high-income earners in several proposals over the past few years.
Deficit Reduction: As part of federal deficit reduction talks, following are proposals that have been raised, which include changes to the charitable deduction:
- “Gang of Six” – A Bipartisan Plan to Reduce our Nation’s Deficits Report recommends that Congress “reform, not eliminate” tax expenditures for health, charitable giving, homeownership, and retirement. (July 2011)
- Solutions Initiative - The Peterson Foundation released six deficit reduction plans from the American Enterprise Institute, the Bipartisan Policy Center, the Roosevelt Institute Campus Network, the Center for American Progress, the Economic Policy Institute, and the Heritage Foundation. The six plans addressed all aspects of Federal spending and revenue-raising, including reforming the current tax code.
- Bipartisan Policy Center: Debt Reduction Task Force – Restoring America’s Future Report recommends a tax credit equal to 15 percent of any donation received, similar to the Gift Aid system in Great Britain. (February 2011)
- The President’s National Commission on Fiscal Responsibility and Reform (“Deficit Commission”) - The Moment of Truth Report proposes recommendations to reduce the deficit that call for massive discretionary spending cuts and eliminating tax incentives, including the charitable deduction. (December 2010)
- Century Foundation, Demos, and the Economic Policy Institute – Investing in America’s Economy: A Budget Blueprint for Economic Recovery and Fiscal Responsibility Report proposes converting the deduction to a refundable credit. (November 2010)
Opinion & Thought
Opinion and thought pieces by experts, scholars, and leaders in the nonprofit sector on the charitable deduction.
- 12/25/11The Grinch who Wants to Steal Charitable Deduction, San Diego Union-Tribune
- 12/18/11 It’s Time to Write Off the Charitable Tax Deduction (Jack Shakely), LA Times
- 11/23/11 Ending Charity Tax Break Will Hurt Poor Most (Stephen L. Carter), Bloomberg Businessweek
- 11/21/11 Deductibility rate for charitable donations must be preserved, DelawareOnline
- 11/21/11 Au Revoir to Noblesse Oblige, The Hill
- 11/14/11 Brent Christopher: A rough winter for charitable giving, The Dallas Morning News
- 10/30/11 Obama’s Plan Could Reduce Amount of Charitable Giving, Seacoast Online (Congressman Frank Guinta, R-NH)
- 10/25/11 Limit Charitable Deductions, and the Poor will Pay, USA Today (Brian Gallagher, United Way)
- 10/25/11 Nonprofits Tell Congress: “Help, or at Least Do No Harm”, Nonprofit Quarterly
- 10/18/11 Nonprofit Leaders: Don’t roll back tax incentives for charitable giving, The Hill
- 10/16/11 Opposing the Proposal to Limit Deductibility of Charitable Gifts, Manteca Bulletin
- 10/12/11 Think Again on Reducing Charitable Deductions for Charities, Center Daily
- 10/11/11 Don’t Punish the Philanthropists, Baltimore Sun
- 10/10/11 Guest Opinion: Don’t reduce value of charitable tax deduction, Billings Gazette (Montana)
- 10/8/11 Charities Pay Dearly in Jobs Plan, Boston Herald
- 10/5/11 A Time to Act on Threats to the Charitable Deduction, Re:Philanthropy (Council on Foundations blog)
- 10/5/11 Don’t Be Charitable About Jobs Bill, Charleston Daily Mail
- 10/5/11 Charity Inc.: Charitable deduction cuts threaten nonprofit work, The Journal Record
- 9/20/11 High-income earners and the charitable deduction, Philanthropy Daily
- 9/15/11 Soak the Rich? No, Soak the Needy, Wall Street Journal
- 9/13/11 Obama stumbles on taxes, Buffalo News
- 7/25/11 Keep the Charitable Deduction, Herald Tribune
- 7/25/11 Encourage Charitable Deductions, Miami Herald
- 7/25/11 Reducing Charitable Deduction is a Bad Idea, Star-Telegram
- 7/23/11 UNITED WAY: Preserve tax deduction for donations, Middletown Press
- 7/15/11 Charitable Tax Deduction Fuels Nonprofits, Boosts Economy, Charlotte Observer
- 7/6/11 Retain Tax Deduction for Charitable Donations, Seattle Times
- 4/13/11 Obama’s war on civil society continues, San Francisco Examiner
- 3/25/11 Congress Tackles Tax Incentives (ACR Consider This)
- 2/17/11 Charitable Deduction Cap is Ill Advised, Huffington Post
- 1/26/11 The Charitable Deduction Must Go, Nonprofit Quarterly
- 1/7/11 The War on the Charitable Deduction, Philanthropy Daily (Opinion)
- 1/7/11 How Private Is ‘Private Charity’?, New York Times
- 7/30/10 Sacrificing “Sacred Cows” (ACR Consider This)
- 7/16/10 A Canary in the Coal Mine – Capping the Charitable Deduction
- Conversation With… Threats to Philanthropic Freedom (Summer 2010), Washington Legal Foundation
- 5/7/10The Charitable Deduction? It’s Not Done with Yet?(ACR Consider This)
- 4/1/10 We Must Encourage, Not Hinder, Charitable Giving, DMA Journal
- 2/7/10 President Revives Call to Set Limits on Charity Write-Offs by the Wealthy, Chronicle of Philanthropy
- 2/1/10 Budget Plan Revives President’s Call for New Charitable-Deduction Limit, Chronicle of Philanthropy
- 10/20/09 Capping Charitable Deductions to Pay for Health Care Is a Bad Idea, Roll Call
- 4/15/09 SIMON: Philanthropy Threatened, Washington Times
- 3/3/2009 Assault on Authentic Compassion, National Review
Other Resources
Links to help you stay informed on proposals and legislation or to contact your representative.
- Information for Policymakers and Staff
- Hearings: Following are scheduled or recent congressional hearings on issues impacting charitable giving.
- Quotes - Read what nonprofit leaders, elected officials, and other voices have to say about the charitable deduction.
- Chronicle of Philanthropy - Research, reporting, and views on the charitable deduction.
- State Profiles - State profiles on the economic value and impact of the nonprofit sector compiled by Independet Sector.
- THOMAS (Library of Congress) - Source for federal legislative information including searching for bills, Members of Congress, and legislative committees.
Stay Involved
ACR is engaged in protecting the charitable deduction through a number of ways.
Events:
Following are letters from coalitions of charitable and philanthropic organizations, including the Nonprofit Coalition, to Members of Congress and the Administration:
- 12/15/11 Letter to Chairman Max Baucus (deficit reduction), Nonprofit Coalition
- 11/7/11 Letter to the Super Committee (Committee recommendations), Nonprofit Coalition
- 9/21/11 Letter to the Super Committee (Jobs bill), Nonprofit Coalition
- 9/21/11 Letter to Congress (Jobs bill), United Way
- 7/18/11 Letter to the President & Congressional Leaders (Debit Ceiling/Deficit Reduction Negotiations), Independent Sector (appeared as full-page ad in Politico)
- 7/14/11 Letter to Senator Max Baucus & Congressional Leaders (Debit Ceiling/Deficit Reduction Negotiations), Nonprofit Coalition
- 7/14/11 Letter to members of Congress (Debit Ceiling/Deficit Reduction Negotiations), Grantmakers Forum of New York
- 3/4/11 Letter to the President (FY 2012 Budget), Nonprofit Coalition
- 2/5/10 Letter to the President (FY 2011 Budget), Nonprofit Coalition
- 10/1/09 Letter to Senator Max Baucus (Healthcare Reform), Nonprofit Coalition
- 9/21/09 Letter to Senator Max Baucus (Healthcare Reform), Nonprofit Coalition
Interested in getting involved with efforts to protect the charitable deduction?
Contact William Coughlin (.(JavaScript must be enabled to view this email address)) for more information.
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Consider This…
Ok, we admit it. We’re geeks. Policy geeks. Tax policy geeks if the truth be told.
Normally when we tell someone our specialty is tax, we get an eye roll, or worse. Unless we are with our tax policy peers, we often feel like the skunk at the garden party.
So imagine our sense of wonder over all of the activity in tax world in the last few months. First, Herman Cain gave us 9-9-9, next…
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The latest edition of the ACR newsletter is available below. Here are highlights:
Upcoming Event Summit for Leaders
Washington Roundup:
- State of the Union
- Legislative Activity
Consider This:Tax Policy Geeks Take Center Stage—Tax Plans and Reform
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Further Reading
Bloomberg BNA
This morning BNA reported that the Administration may be stepping back from previous proposals to cap charitable deductions at 28 percent.
Here’s an excerpt from the article:
“The past three budgets the president has submitted have included a limit to the charitable deduction in every single one of them, through limiting itemized deductions,” said Sandra Swirski, director of Alliance for Charitable Reform. “He’s also raised limiting the charitable deduction as a pay-for in at least two of his bills, one on health care, the other a jobs bill. So it keeps coming up.”
However, Swirski said she is now “cautiously optimistic” that when the president’s budget is revealed Feb. 13, Obama’s “stepping away” from the proposal will be clear….
Read the full article here
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ACR is cautiously optimistic that all the pressure we and others have brought to bear may finally be resonating with the Administration. We believe that our tax code should encourage and incentivize private charitable giving. We appreciate that the President seems to acknowledge the value of charitable giving but we remain cautious and won’t speculate until we see the details of the President’s plan.
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Wednesday, March 21, 2012
The Alliance for Charitable Reform (ACR) invites you to the nation’s capital for our third annual ACR Summit for Leaders.
Wednesday, March 21, 2012
8:00 a.m. - 12:00 p.m.
Mayflower Renaissance Hotel
1127 Connecticut Avenue NW
Washington, D.C. 20036
REGISTER NOW
The ACR Summit for Leaders offers a half-day of programming to provide a snapshot of the current political issues impacting philanthropy and nonprofits, and guidance on how to effectively advance your cause in Washington amid competing priorities and constant commotion. The Summit is an excellent opportunity for foundation executives, nonprofit leaders, and others interested in the intersection of public policy and philanthropy.
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Well the curtain is up on 2012. What should we expect from Washington this year? The short answer is not much until the bitter end.
The longer answer: If you thought last year was a nightmare on Capitol Hill, this year is likely to be a whole lot worse. With control of the Presidency, Senate and House all up in the air, it is going to be all politics, all the time.
So what can we expect in the short term?
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Happy New Year and welcome to 2012! We anticipate a busy year ahead and look forward to keeping you up to date on the issues that matter to our community.
The latest edition of the ACR newsletter is available below. Here are highlights:
Washington Roundup:
- Current State of Play
- What’s Next
Consider This: 2012 Congressional Forecast
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