Federal Legislation
The Washington Legal Foundation just published its Summer 2010 edition of Conversations With…
This edition is dedicated to threats to philanthropic freedom and features Former Attorney General of the United States and Pennsylvania Governor Dick Thornburgh leading a discussion with Dr. Larry P. Arnn, President of Hillsdale College; Heather R. Higgins, President and Director of The Randolph Foundation; and Adam Meyerson, President of The Philanthropy Roundtable. The three reflect on the American tradition of philanthropy and the growing movement to impose further government regulation on the philanthropic world.
Further Reading
Consider this…
There are various third rails in politics – things politicians don’t generally touch for fear of the backlash. Programs like Medicare and Social Security, farm subsidies, and veteran’s benefits.
And there are some third rails in the tax world as well. For years, Congress has implemented and extended popular tax deductions and credits for both individuals and institutions that have achieved a “sacred cow” status. The home mortgage interest deduction and the R&D tax credit are just two such examples…
Set this against our country’s current fiscal situation: Rising national debt and new public policy priorities… Suddenly, those sacred cows in tax world aren’t so sacred anymore.
Nonprofits are not immune from this debate – the charitable deduction is considered a tax expenditure… What does this mean for us?
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Consider this…
Unlike the federal government, every state except Vermont has some form of balanced budget requirement. What does this mean in practical terms for the future of philanthropy?
We all know that the economy has not been kind to state and federal budgets. At the federal level, the government has responded by pumping money into the economy, in the hopes of jumpstarting economic growth and in the process running up enormous deficits. But balanced budget requirements at the state level won’t allow that and as a result, states are in the hunt for revenue with a vengeance.
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Consider this…
Earlier this year, Congress passed a massive health care bill which is now law. In very short order, Congress is expected to approve a massive overhaul of the rules governing the financial services sector – known as the Wall Street Reform bill.
So you might ask why did the Senate spend nearly eight weeks and try multiple times to close off debate on a relatively modest package of tax provisions (about $12 billion a year over ten years) that aren’t new, are pretty popular, and are merely extensions of current law?
The short answer is 60 votes, concerns about deficit spending and controversy over how to pay for these tax provisions…Needless to say, House Democrats are not amused. What does this mean going forward?
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As of Jult 1, 2010 -
As we previously reported, the House and Senate have been working to reconcile the differences between their versions (H.R. 4173/S. 3217) of the financial regulatory reform legislation – the Wall Street Reform bill. Earlier this week, they completed their work which included important provisions that ACR and others worked hard to include (see letter from ACR and Nonprofit Coalition here). These provisions remove most nonprofits that offer charitable giving advice and group financial education from regulation, fees and oversight.
These provisions are a big win for the nonprofit community. Our advocacy efforts coupled with your examples about this bill’s impact on your day-to-day operations resonated with Members of Congress.
A final financial services reform conference report must now be approved by both the House and Senate. We expect the House and Senate to pass the final bill shortly.
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Consider this…
You know the old adage that death and taxes are the only sure things in life? Well for the time being at least one of those certainties is in question – on January 1 of this year, the tax on estates disappeared and went to zero. That’s right, zero.
So Congress must be working night and day to resolve the issue right? Wrong. With half of 2010 behind us, there is no clear plan to deal with the estate tax.
Why? Keep Reading…
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Consider this…
Remember the Republican mantra of “no new taxes”? Well, get ready to hear more from what CBS News calls the “no new debt Democrats.” There’s a trend in the making…
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Background:
Senators Blanche Lincoln (D-AR) and Jon Kyl (R-AZ) continue to work on an estate tax package that would include a higher exemption and lower rate. This requires the senators to identify means of raising federal revenue to make up the revenue loss associated with this plan. They have been in intense negotiations to work out a compromise deal that would get the approval of Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Charles Grassley (R-IA). Though several sources had indicated that a deal was shortly forthcoming, it appears as though the process has hit yet another roadblock.
It is likely that discussions on the estate tax will continue, but less publicly. As Congress continues to debate how to address the estate tax, ACR staff will closely follow these discussions, due to concern that foundations could be used as a “pay-for” for any eventual estate tax legislation.
Update
As of June 18, 2010 - Last week, Senator Chuck Schumer (D-NY) tried unsuccessfully to add his legislation to flatten the PF excise tax rate to 1.39% to the Tax Extenders bill being debated by the full Senate. What was the stumbling block? As the Chronicle of Philanthropy reports, Senator Charles Grassley (R-IA) submitted a letter calling on the Council on Foundations (COF) to provide additional data about the need for the legislation and its impact on foundation grantmaking. Specifically, Senator Grassley questioned whether this legislation would actually result in charities getting more funding, saying “[f]lattening the rate without mandating that the tax savings be paid out seems like it’s rewarding those who just do the minimum while hurting those who go above and beyond what’s required.”
COF responded quickly, but the inquiry by Senator Grassley likely precludes Senator Schumer’s legislation from being ultimately added to the tax extenders bill. We expect Senator Schumer to continue to try and add this legislation to future tax bills.
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Consider this…
If ever there was a year to think about upping your charitable giving, this is the year.
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