Apr 21, 2011
Update - Tax Reform (4.21.11)
Update as of April 21st, 2011:
Tax Reform
Tax-writing committees for both the House and the Senate are conducting 40 hearings this year to examine all aspects of comprehensive tax reform. Last week, the Senate Finance Committee held a hearing that explored global tax administration, which essentially examined how other countries collect their taxes. During the hearing, Ranking Member Orrin Hatch (R-UT) asked the witnesses about the Canadian system of incentivizing charitable giving, which occurs through a tax credit instead of a deduction. Also last week, the House Ways and Means Committee held a hearing that explored the burden of tax incentives on individual payers. Amidst a discussion on corporate tax incentives, witnesses unanimously agreed that the biggest burden for all taxpayers is uncertainty. They cited the expiration and renewal cycle of the IRA charitable rollover as an example of how tax payer behavior can hinge on Congress’s action.
In addition, Investment News reported that several financial companies have seen a spike in charitable giving in the beginning of this year due to the tax rate compromise reached between Congress and the White House at the end of 2010. Furthermore, Gallup released a poll that found that a majority of Americans are more opposed to eliminating the charitable deduction as a means to tackle deficit reduction than other highly-favored tax incentives. USA Today penned an article citing this poll when analyzing the attack on tax incentives contained in the deficit reduction plans released so far. Put together, these articles represent our long-held view that the tax code does indeed affect charitable giving, and we plan to highlight this in our visits on Capitol Hill.