In the continued effort to offset the $400 billion cost of increasing the debt limit, the White House again called for capping itemized deductions at 28%, down from the current 35% top rate. This provision would include the charitable deduction.
The proposal, similar to what President Obama included in his FY2012 budget proposal, would raise $293 billion over 10 years. Republicans roundly rejected this provision after the budget’s release, and with their well-publicized aversion to including tax increases in the Biden talks, we believe this proposal will not progress. We will, however, keep our ears to the ground and provide you with any more updates.
Thursday, June 30, 2011
The latest edition of the ACR newsletter is available below. We are sending this newsletter one day early before the long Independence Day Weekend.
Happy Independence Day!
As our nation celebrates its declaration of independence from British rule, we pause to remember that among the freedoms we as Americans enjoy is the freedom to give to the issues, causes and organizations we value in the manner we choose –what we call philanthropic freedom. Have a happy, safe Fourth of July!
Here are highlights:
Deficit Reduction/Debt Ceiling Talks
Consider This: Debt Ceiling “Soaps” – Drama Unfolds on Capitol Hill
Click continue reading for the latest edition of the ACR newsletter.
It is high soap opera season here in Washington, DC.
After effusively praising the Vice President for his role in high-level debt ceiling negotiations one week, Congressman Eric “Young and the Restless” Cantor (R-VA) abruptly walked out of those negotiations the following week.
We are reminded by an old budget hand – a former staff director of the Senate Budget Committee - that in a negotiation with stakes as high as these, there has to be accompanying soap opera-like drama.
Expect more of the same the closer we get to the August 2nd deadline to raise the debt ceiling. It will be “Days of our Lives” meets “Another World” meets (Paul) “Ryan’s Hope”...
As of June 30, 2011 - In early June, House Ways and Means Committee Ranking Member Carl Levin (D-MI) spoke at the Center for American Progress about the need for comprehensive tax reform. As part of his speech, Rep. Levin, who is a thought leader on tax reform among his colleagues, discussed how certain tax provisions have a positive impact beyond those who take advantage of them and really benefit the whole American middle class. One such provision he mentioned was the charitable deduction: “The benefit of the charitable deduction and the deduction for state and local income taxes are somewhat more concentrated in the upper-income ranges, but in both cases nearly half of the benefit is still going to more than 20 million households making less than $200,000… In the case of the charitable deduction, one has to keep in mind that the recipients of the contributions include universities, hospitals, churches and soup kitchens that provide critical services to working families.” The Ranking Member’s remarks are important to note, since, as Ezra Klein of the Washington Post reminds us, the charitable deduction remains on the chopping block during deficit reduction negotiations.
Updates on deficit reduction negotiations as of June 30th, 2011:
On Wednesday, President Obama held a press conference regarding the debt limit talks, criticizing Congressional leaders for their lack of urgency. The President said, “I’m very amused when I hear, ‘The president needs to show more
leadership on this.’ [Members of Congress] need to do their jobs. Now’s the time to go ahead and make the tough choices. That’s why they’re called leaders.” The President urged Republicans to “be more balanced” in their approach to the negotiations and would examine more options to solving the debt crisis than just spending cuts. In response to the President’s remarks, Senate Majority Leader Harry Reid (D-NV) decided Thursday to cancel the scheduled July 4th recess so that deficit reduction negotiations can continue.
Friday, June 17, 2011
The latest edition of the ACR newsletter is available below. Here are highlights:
Washington Roundup: Deficit Reduction
Consider This: Republican Contenders Sing the Same in Tune: Cut Taxes
Click continue reading for the latest edition of the ACR newsletter.
This week’s Republican Presidential debate made it pretty clear how the candidates feel about taxes. They really, really don’t like them…
How will all of this play into what is happening on Capitol Hill? For starters, in the ongoing debt ceiling debate it draws the Republican line in the sand on no new taxes that much deeper…
Updates on deficit reduction negotiations as of June 17th, 2011:
Earlier this week, Politico reported that Vice President Joe Biden’s deficit reduction group resumed talks in earnest, with a focus on bridging the $1.1 trillion gap in spending cuts that has emerged between Democrats and Republicans. As a start, some Democrats have proposed a 3:1:1 ratio, where every $3 in spending cuts would be coupled with $1 in new taxes and $1 in stimulus. In addition, the idea of joining deficit reduction with an employee payroll tax reduction to stimulate the economy has been gaining steam. The New York Times reports that a job-creation plan of some sort is likely to emerge from these talks. In addition, various Members of Congress from both parties have renewed the call to allow multinational companies based in the United States to bring back profits from overseas at reduced tax rates.
Adam Meyerson, president of The Philanthropy Roundtable, comments on the new NCRP initiative
On June 8, the National Center for Responsive Philanthropy (NCRP) introduced a new project, Philanthropy’s Promise, an initiative to encourage grantmakers to voluntarily “allocate at least 50 percent of their grant dollars to address the unique needs of the poor, elderly, disabled and other underserved populations, and at least 25 percent towards supporting advocacy, community organizing and civic engagement to address the root causes of social problems.” This initiative channels at least some of the criteria outlined by NCRP in its 2009 Criteria for Philanthropy at Its Best: Benchmarks to Assess and Enhance Grantmaker Impact.
After reviewing NCRP’s latest initiative, Roundtable president Adam Meyerson commented:
The Philanthropy Roundtable believes that voluntary initiatives such as “Philanthropy’s Promise” are consistent with a free society under two conditions. First, it is important that the initiatives remain truly voluntary, without the threat of coercion from regulators, legislators, community activists, and/or mandatory accreditation systems. Second, it is important that donors and foundations remain free to give to the many worthy charitable objectives that are not included in the NCRP “promise.” Activist groups should be free to criticize donors’ choices, and to seek to push philanthropic giving in a different direction, so long as they defend and respect the freedom of donors to make their own charitable decisions.
Chronicle of Philanthropy, June 7, 2011
The Chronicle of Philanthropy reports on reactions of Massachusetts foundations to efforts to prohibit compensation of nonprofit board members:
Here’s an excerpt:
The measure arose from a proposal backed by Martha Coakley, the Massachusetts attorney general, that followed a public outcry over five-figure stipends for directors of the state’s four nonprofit health insurers, two of which voluntarily suspended board compensation.
The bill has moved swiftly in recent weeks after it was attached to the state budget bill that passed the Massachusetts Senate last month
Beth Smith, executive director of the Hyams Foundation, said she had been following the attorney general’s report on nonprofit health insurers but did not realize until recently that the proposed law could apply to her foundation as well. The Hyams Foundation paid 10 of its dozen board members a total of $134,125 in 2009.
“A number of our trustees come from the nonprofit sector, including grass-roots groups, and immigrant communities and low-income communities. It might affect our ability to attract some people if they really need to make a tradeoff in terms of their own income and lives.” Ms. Smith said. “If the law passes, the board will have to have an important conversation about it. I’m not sure what the board would decide to do.”