Mar 30, 2011
Senate Finance Committee Hearing on Tax Incentives
Hearing Summary
The Senate Finance Committee held a hearing this morning titled How Do Complexity, Uncertainty and Other Factors Impact Responses to Tax Incentives?, including charitable giving incentives. Seven (of 24) Senators on the Finance Committee attended the hearing. Senator Thune specifically offered his support for the charitable deduction. He noted that by incentivizing private giving, the charitable deduction reduces the burden on government (and taxpayers) to provide social services. Witnesses were also generally supportive of the charitable deduction noting that reducing the charitable deduction would decrease the overall amount of giving, regardless of income level. While supportive of current law, one witness offered an alternative to consider—a flat credit across all income levels with a floor (for example $100) to encourage larger gifts.
In conjunction with the hearing, the Heritage Foundation released a paper on the charitable deduction, Obama’s Latest Proposal to Reduce Charitable Deductions Would Crowd Out Civil Society, available here.
The Senate Finance Committee intends to hold more than 20 hearings this year on various issues associated with the tax code as part of its tax reform agenda. We can expect foundation issues to be focused on generally in some of these hearings as well as specifically in at least one focused hearing – tentatively scheduled for the 2nd Q 2011.