Jan 28, 2011
ACR newsletter (1.28.11)
Friday, January 28, 2011
The latest edition of the ACR newsletter is available below.
State of the Union
President Obama delivered his second State of the Union address on Tuesday, January 25th, which USA Today best summarized as a “carefully calibrated” speech that “marked the culmination of a three-month transformation that has rebooted… Obama’s presidency and launched his re-election campaign.”
The President outlined several major initiatives he seeks to undertake in the next two years and among them was corporate tax reform. While the President specifically discussed corporate tax reform, there remains a strong link between corporate tax rates and individual rates, as the House Ways and Means Committee hearing last week demonstrated (see below). President Obama did not outline any specifics and we will continue to keep our ear to the ground for any updates.
House Ways and Means Hearing on Tax Reform
As we reported in our last newsletter, the House Ways and Means Committee held its first in a series of hearings on tax reform last Thursday, January 20th. Corporate tax rates dominated the discussion, which briefly touched on the connection between corporate and individual tax rates. Nina Olson, the National Taxpayer Advocate in the Treasury Department, stated that it is very difficult to reform corporate rates without touching individual rates because over half of all business income is reported on individual returns. Further, she noted that an approach similar to the Deficit Commission’s recommendation was something to seriously consider. We will continue to monitor future hearings and look forward to more discussions on tax reform.
While the 112th Congress has just begun, two bills seeking to repeal the federal estate tax have already been introduced. Rep. Michelle Bachmann (R-MN), who also offered her own rebuttal to the State of the Union, introduced the first bill, H.R. 86, the End Tax Uncertainty Act of 2011. The bill seeks to permanently repeal the federal estate, gift, and generation-skipping transfer taxes by modifying the Internal Revenue Code. The repeal would be effective January 1, 2011. This bill would also repeal the alternative minimum tax on individuals and reduce the maximum corporate income tax rate to 25%.
Rep. David Dreier (R-CA) introduced a very similar bill, H.R. 99, the Fair and Simple Tax Act of 2011 (FAST), on the same day that Rep. Bachmann introduced hers. Similar to Bachmann’s bill, Rep. Dreier’s bill would permanently repeal the federal estate, gift, and generation-skipping transfer taxes through the Internal Revenue Code. However, FAST goes on to modify more aspects of the tax code. It proposes to cut taxes by providing an alternative determination of individual income tax liability, reducing the tax rate on corporate income and capital gains, and creating tax-free retirement savings accounts.
While fundamental tax reform is on the Congressional radar, we are hearing that any effort would be a complete overhaul of the system, and that bills addressing specific sections of the tax code will not advance.
White House Council on Community Solutions
As we reported on December 17th, 2010, President Obama established the White House Council for Community Solutions through an Executive Order. The Council will hold their first meeting on Friday, February 4th at 1:00PM EST, and it will be broadcast live. As of now, the agenda will include a discussion of the Council’s charge, the key issues impacting youth employment, education, work preparedness and the healthy transition to adulthood, and establish committees to carry out the Council’s work
March 8, 2011
8:30 a.m. – 12:00 p.m.
Capitol Hilton Hotel
The Alliance for Charitable Reform will host the 2011 ACR Summit for Leaders in Washington D.C. We invite foundation executives, nonprofit leaders, and other interested in discussions on public policy issues impacting the charitable community. Our speakers will include Congressional staff, policy experts and nonprofit leaders.
AGENDA FOR TUESDAY, MARCH 8:
8:30 a.m. – 12:00 p.m.
ACR Summit for Leaders
12:00 – 1:30 p.m.
Lunch co-sponsored by ACR, Council on Foundations, and the Forum of Regional Associations
of Grantmakers. More information to Follow.
Reception to honor a member of Congress that has championed foundations and nonprofit
issues. More information to follow.
Visit: http://www.acreform.com for more information.
This event will precede Foundations on the Hill hosted by the Council on Foundations andForum of Regional Associations of Grantmakers.
State of the Union 2011: Prom Night for Democrats and Republicans
Earlier this week, we saw the pomp and circumstance of the State of the Union married with the question that strikes fear in the heart of anyone who is or has ever been in high school, “Who are you taking to prom?”
In an attempt to show that Democrats and Republicans can really, really get along, a number of members reached across the aisle and asked their counterparts to sit with them for the State of Union - a practice quickly dubbed as “going to the prom” by the media and others on Capitol Hill. Congressmen Peter King (R-NY) and Anthony Weiner (D-NY), seen a few months back screaming at each other on cable television, were seatmates. Senators Dick Durbin (D-IL) and Mark Kirk (R-IL) also partnered up, with Durbin saying, “I’m bringing the popcorn; he’s bringing a Coke with two straws. Just kidding of course.” And some hearts were dashed - former Speaker Nancy Pelosi (D-CA) turned down Majority Leader Cantor (R-VA) as she already had a date with Rep. Roscoe Bartlett (R-MD).
So just what did we hear and what did we not hear in the State of the Union address? (continued)
Here are recent headlines you may find interesting:
Debate continues on what Congress should do with the charitable deduction:
- 1/26 A New Big Idea: Create Jobs And Reduce Poverty By Doubling The Charitable Deduction, Huffington Post David Frumkin reports on a proposal by a budget expert at the Brookings Institution to temporarily double the tax deduction for charitable giving to organizations that benefit the needy or create jobs.
- 1/26 The Charitable Deduction Must Go, Nonprofit Quarterly (Opinion) A fundraising professional discusses why the charitable deduction should be eliminated and replaced with a tax credit.
- 1/7 The War on the Charitable Deduction, Philanthropy Daily (Opinion) Jeff Cain discusses recent events that seek to limit the charitable deduction and defends the tax incentive.
- 1/7 How Private Is ‘Private Charity’?, New York Times (Opinion) A Princeton economics professor argues why the tax deduction makes charitable giving public money and suggests eliminating it or replacing it with a tax credit.
1/21 Peterson Foundation Makes $1.2 Million in Grants for Debt-Reduction Proposals, Wall Street Journal
The Peter G. Peterson Foundation has provided six national policy/research organizations with grants (Bipartisan Policy Center, the American Enterprise Institute, the Center for American Progress, the Economic Policy Institute, the Heritage Foundation, and the Roosevelt Institute Campus Network) to find solutions to the solutions to the nation’s debt problem.
Additional coverage on the report released recently by Senator Charles Grassley (R-IA) on the financial practices of media-based ministries:
- 1/13 Sen. Grassley’s Televangelists Results In, Nonprofit Quarterly
- 1/14 Grassley Shouldn’t Give in to Secretive Ministries, Des Moines Register
1/15 Amid Cuts, Public Colleges Step Up Appeals to Alumni, New York Times
The Times reports that due to budget shortfalls, state colleges have started ramping up fundraising efforts, but this has required educating their alumni community on how much private philanthropy funds public universities.
1/24 Meet Philanthroper: The Daily Deal Site With a Charitable Heart, Fast Company
Fast Company reports on the newest online giving website which raises funds for charities by offering subscribers the chance to donate $1 per person for 24 hours to an organization picked daily.
1/24 Cargill Philanthropies Could Become America’s Third Largest Grant Maker, Chronicle of Philanthropy
The Chronicle reports that a set of foundations created by Margaret A. Cargill, an heir to the Cargill Corporation, are set to receive roughly $9-billion from the conversion of corporate shares, making them (collectively) the third largest grantmaker in the U.S.
1/20 They Work for Us: In Democracies the Elites Serve the Masses, The Economist
In a Special Report on global leaders, The Economist examines the rise of wealthy across the globe.