Coalition
ACR and coalition work to ensure charitable deduction are left off the table
On Saturday, November 21st, the Senate voted 60 – 39 in favor of a procedural motion to allow the Senate to begin debating their health care package, “The Patient Protection and Affordable Care Act.”
ACR is pleased that, until this point, a limitation on the itemized deduction has not been included in either the House or Senate health care legislation. However, we remain concerned that it could get added during the Senate floor amendment consideration that begins next week, after the Thanksgiving recess and may last for several weeks moving this debate likely into 2010.
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Further Reading
United Way Worldwide speaks out against using charitable deduction to pay for healthcare reform
A member of the charitable deduction coalition speaks out against Congressional proposals to cap the charitable deduction to pay for health care reform or other purposes. Brian Gallagher, CEO of the United Way Worldwide, reminds Roll Call readers that giving is part of the fabric of American society and has been embodied in our federal tax laws. Capping the deduction is akin to taxing income Americans would use to benefit the common good. As a result, the people served by charities will suffer.
Gallagher notes, “Disconnecting the charitable deduction from the tax rate is a step toward abandoning who we are as a nation — one that lifts up and supports those in need.”
Read the full article here.
Senate Committee passes health care bill without cap on charitable tax deduction or exec compensation
Yesterday, in a 14-9 vote, the Senate Finance Committee pushed healthcare legislation on to the next phase of passage. ACR is pleased to report that none of the nonprofit related amendments we were monitoring made it into this final bill.
None of the amendments using the 35% limitation on itemized deductions were offered during the mark-up. However, one senator briefly mentioned the limitation and how it was necessary to restore fairness in the current system. The ACR team is working closely with the charitable deduction coalition and Sen. John Thune’s office to gather support and ensure that our message to oppose any attempts to limit the charitable deduction will be heard on Capitol Hill.
In addition, amendments from Sen. Charles Grassley clarifying IRS authority regarding governance questions on the Form 990 and eliminating the safe harbor for tax-exempts from the IRS when determining “excessive” executive compensation were not included in the bill. We anticipate that these proposals may resurface in the future. Sen. Grassley highlighted his concern about the profit-motive of nonprofits and his desire to hold tax exempt organizations more accountable in the executive compensation area.
For more information, check out The Chronicle of Philanthropy’s coverage:
ACR & coalition submit a petition to Senator Baucus
Today, a letter was sent by a coalition of organizations and foundations to Senator Max Baucus, the current chairman of the United States Senate Committee on Finance, to spare the charitable tax deduction. ACR joined this coalition with the aim of protecting the charitable deduction from future reductions as a policymakers look to it as a revenue raiser for expansions in government programs. The coalition includes the American Red Cross International, Council on Foundations and the United Way among others. We’ll keep you posted.
Further Reading
U.S. Senator Thune on the Administration’s proposal to limit charitable giving
Senator John Thune of South Dakota explores the impact of President Obama’s proposal to reduce the charitable tax deduction. Thune makes the case for why the charitable community will be hurt by diminished giving and makes clear his stance to preserve the full charitable tax deduction.
Further Reading
