ACR News 09.19.14—Congress Returns, Camp Plan Effect on Charitable Giving
>> Federal: Washington Roundup
>> Federal: Tax Extenders Delayed
>> Federal: Urban Institute Releases Report
>> Federal: Consider This
>> Top Reads: Study finds Camp’s tax reform would reduce charitable giving
Congress returned to Washington last week after the summer recess, but only briefly. Members will leave town late this week to return to their districts to campaign before the elections on November 4. During this short work period, leadership in both the House and Senate addressed only a few ‘must-do’ items. These included a bill to fund the government beyond the end of September to avert a government shutdown. On Wednesday, the House passed its bill to keep the government open through December 11, which also included provisions to address the recent Ebola crisis, renewed the operating authority for the Export-Import Bank through June 30, 2015, and extended the Internet Tax Freedom Act through December 11. The Senate passed the bill without amendments on Thursday, 78 to 22.
Congress officially delayed action on tax extenders, the 60-plus annually expiring tax provisions, until after the November elections. The issue received some attention this week when the House introduced a comprehensive jobs package that contained four popular corporate tax extenders that the House made permanent earlier this year. But the Senate did not take up the legislation during this work period.
As for the rest of these tax extenders, the House remains committed to its approach of addressing each provision individually and making select extenders permanent. As you may recall, in July, the House passed H.R. 4719 – the America Gives More Act – which would make permanent three charitable tax extenders: the IRA charitable rollover, the enhanced deduction for conservation easements, and the enhanced deduction for food donations. H.R. 4719 also included two other provisions that are not tax extenders but have long been ACR priorities: the streamlining of the private foundation excise tax to a flat one percent rate, and giving donors until April 15 to make charitable donations for the previous calendar year.
Senate Finance Committee Chairman Ron Wyden (D-OR), however, said he remains committed to passing a two-year extension of expired tax incentives, much like the bill he negotiated with Ranking Member Orrin Hatch (R-UT) and passed out of committee last April. As of now, it is unclear how the House and Senate will reconcile their two approaches but some Senate aides speculate that there could be an appetite in the Senate for permanently extending a few select provisions – the ones with the most bipartisan support – and authorizing a two-year renewal for the rest.
Last week, the Urban Institute released an analysis of the impact that House Ways and Means Chairman Dave Camp’s tax reform draft would have on charitable giving. The study found that the full combination of Chairman Camp’s proposed changes could decrease charitable giving between $17 billion and $34 billion per year. More specifically, the study found that implementing just the 2% of adjusted gross income (AGI) floor, combined with a lower maximum limit for cash gifts of 40% of AGI, would decrease giving by up to $10.6 billion. These are staggering numbers and reinforce the need to continue to communicate with lawmakers about the importance and need for the charitable deduction.
As you may recall, Urban Institute Fellow Dr. Eugene Steuerle, one author of this new report, is also a member of the ACR Advisory Council. In an interview with ACR in July, Dr. Steuerle explained how the tax policy included in the draft affects the charitable sector and offered his thoughts on provisions that would help strengthen it.
With fewer than 50 days to go, we appear to be in a near coin toss for control of the Senate.
So what is really at stake in November? Not the continued Republican control of the House because that seems like a done deal. It is all about the Senate and the set-up for the Presidential election in 2016. Although we obsess over any tidbit related to the toss-up Senate seats, we know in our heart that the stakes are not nearly as high as our level of focus.
Make no mistake about it, controlling the Senate means, to a large degree, controlling the conversation. The majority party schedules the time of the Senate floor for legislation it wants to bring up and also shapes the committee hearings, including the witnesses called to testify. However, even if the Senate does flip, the margins will almost certainly be so close that it will be near impossible to get very much done. And there is a better than even chance that if Republicans take back control of the Senate in 2014, Democrats will wrestle back the chamber in 2016 because of the number of seats that will be up for grabs. In 2014, 20 Democrats and 13 Republicans are up for election while in 2016 that flips to 10 Democrats and 24 Republicans.
What will it mean to us if Republicans take control of the Senate and Senator Hatch (R-UT) takes the gavel of the Finance Committee? While both Senator Hatch and current Chairman Wyden (D-OR) can be expected to pursue tax reform in the next Congress, both have been true friends of our sector and we don’t expect much to change. Despite the dysfunction in Washington, we will continue to press our issues in a bipartisan, bicameral way and look to them for help in that regard.
- National: Study finds Camp’s tax reform would reduce charitable giving
- National: Study: Camp’s Tax Reform Plan Could Cut Charitable Giving By 14 Percent
- National: The Janitor Who Became a Major Donor
- National: In Memoriam: Truett Cathy 1921-2014
- National: E-mails show IRS attempts at damage control
- National: Emails Raise New Questions About IRS Targeting
- Local: Charitable giving helps individuals, economy, community
- Local: Michigan tax fix bill gets final approval
- ACR Blog: Constitution Day
- ACR Blog: Honoring the Families of the Victims of September 11
Please feel free to email us at firstname.lastname@example.org if you have any questions, stories or topics you would like us to include in our newsletter.
Looking for ARCHIVES of this newsletter? Click here.