Federal Legislation
In an expected move, the Senate voted down the Buffett Rule today by a vote of 51 to 45. 60 votes were needed. The Buffett Rule levy’s a minimum tax of 30% on higher-income earners and, for purposes of this tax, eliminates all credits and deductions except for the charitable deduction. By singling out the charitable deduction, supporters of the bill acknowledge that the charitable deduction is different from all other deductions and credits because it is the only incentive designed to encourage Americans to give away their money. However, ACR believes that entrepreneurship and wealth-creation is vital to sustaining charitable giving. A minimum tax levied on high-income earners ultimately leaves them with less to give and it is these Americans that, study after study has shown, give the most. ACR looks forward to many further conversations with decision makers in the coming months about how we can encourage private giving, not reverse it.
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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Consider This…
Let’s step away from the Super Committee for a moment and take a look at the President’s jobs bill and how it might affect the tax exempt sector.
We know that one of the ways the bill is paid for is through a permanent 28 percent cap on the deduction for charitable giving. That proposal has been around for a while and we have reported on it previously. We believe it would cast a chill on giving and ultimately shrink the charitable sector, likely reducing the number of jobs in the sector.
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Join us in Washington, D.C. on October 6, 2011
ACR Fly-In/Speak Out: Preserving the Charitable Giving
Date: Thursday, October 6, 2011 (plus working dinner on Wednesday, October 5)
RSVP: Sasha Simpson (.(JavaScript must be enabled to view this email address) )
This week, the Administration proposed a new Jobs bill which is to be, in part, paid for with a substantial cut to the value of the charitable deduction…
In addition, we expect the Senate Finance Committee to hold a hearing on charitable giving incentives in mid-October. The lead-up to this hearing gives us an additional opportunity to provide these Senators with the real-world impact of cutting the charitable deduction, which we hope will inform the debate and discussion…
ACR is hosting a Fly-In/Speak Out to preserve charitable giving on Thursday, October 6th in Washington, DC (with a working dinner the evening before to prepare for the next day).
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Yesterday, September 12th, President Obama released details on how he will finance the job creation plan he outlined to Congress last week. The $447-billion jobs bill (titled the American Jobs Act) would be paid for in part by limiting itemized deductions (including the charitable deduction) to 28 percent for families with taxable income of $250,000 ($200,000 for individuals).
The president has proposed limiting itemized deductions several times during his presidency including in his FY 2011 and FY2012 budgets and to pay for healthcare reform.
The nonprofit community has rallied in opposition. Sandra Swirski of ACR responds to the president’s plan in the Chronicle of Philanthropy noting “That’s exactly the wrong direction to go in… And at the end of the day, limiting the charitable deduction is going to hurt [those in need] the most.”
Also, the Senate Finance Committee is expected to hold a hearing in mid-October on charitable giving incentives, chief among them is the charitable deduction. We can expect plenty of activity aimed at Washington in the interim.
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Consider This…
Below is your –hopefully– handy guide to the new Congressional Super Committee (“SC”). All of Washington will be riveted by their efforts over the next 100 days. Needless to say, we are paying close attention to their work.
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Friday, August 12, 2011
The latest edition of the ACR newsletter is available below. Here are highlights:
Washington Roundup:
- Deficit Reduction/Super Committee
- Fall Preview
Click continue reading for the latest edition of the ACR newsletter.
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All attention in Washington this week has focused on the members appointed to the Joint Committee on Deficit Reduction, a.k.a. the Super Committee.
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Congress approves and President signs debt deal, charitable deduction spared… for now
President Obama has signed S. 365, the Budget Control Act of 2011, into law raising the federal debt ceiling. The Senate approved the bill at 12:00 PM today, by a vote of 74-26. This vote occurred less than 24 hours after the House of Representatives approved the bill, by a vote of 269-161, and then promptly recessed until September 7th.
As you may know, the bill raises the debt limit by $2.5 trillion in two stages, which will provide the Department of the Treasury with enough borrowing authority to last until 2013. This increase is paid for by an immediate $1 trillion in cuts from defense and discretionary spending…
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Consider This…
With just a few days to go, where do we stand on raising the debt ceiling and why should foundations care?
Obviously we all have an interest in avoiding the kind of economic Armageddon that some are predicting if we don’t raise the debt ceiling. We’ve heard from foundation leaders who are watching and waiting to see how these unsettled economic factors will impact their organizations’ investments, noting that another sharp decline could have a dramatic impact on their investments and their work. But longer term we need to be mindful about what has been put on the table over the course of this debate. If this protracted debate is any indicator the nonprofit sector is likely to be challenged like never before.
Most of the reason for these challenges can be traced to money…
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