Tax reform is at the top of the agenda on Capitol Hill, and philanthropy has a critical stake in key proposals moving through both the House and the Senate. Last week, the House Ways and Means Committee cleared its version of a tax reform bill, and the House is expected to take a vote this week. The Senate Finance Committee is currently debating the Senate version. Philanthropy Northwest is deeply concerned about the proposed reforms. Below, we outline each bill—and two actions you can take to help protect what matters.
H.R. 1, the House bill, contains provisions that will greatly harm the charitable sector. The bill doubles the standard deduction while keeping the charitable deduction in its current form, which will dramatically reduce the percentage of taxpayers who will itemize on their taxes and take a deduction for charitable contributions. The provision lessens incentives for charitable giving that could lead to a loss of up to $13 billion a year in donations to nonprofits, according to an Indiana University study, and thousands of jobs in the nonprofit sector. The House bill would also repeal the Johnson Amendment, which protects charitable organizations from politicization.
The current Senate bill leaves the Johnson Amendment intact but, like the House version, would make the charitable deduction out of reach for 95 percent of taxpayers by doubling the standard deduction. An amendment introduced in the Senate Finance Committee by Sens. Ron Wyden (D-OR) and Debbie Stabenow (D-MI) would make the charitable deduction available to all Americans, not just those who itemize their tax returns. Philanthropy Northwest is in a unique position because several legislators from our region serve on the Finance Committee and are shaping the bill at this important juncture: Ranking Member Wyden and Sens. Mike Crapo (R-ID), Maria Cantwell (D-WA) and Michael Enzi (R-WY).
Congress and the President are aiming to enact tax reform by December. With the legislation rapidly moving, now is the time to weigh in with our law makers about what’s at stake for philanthropy.
We encourage you to join us in the following actions this week:
- Contact Your Senators: Thank them for their support for charities in [your state] and urge them to protect charitable giving in the Senate tax reform bill. Express your concern that the doubling of the standard deduction will result in a loss of charitable giving and nonprofit jobs in your state. Ask your senator to support proposals that incentivize giving for all taxpayers. Find your senators’ contact information.
- Contact Your Representatives: Thank them for their support for charities in [your district] and urge them to vote NO on the tax reform bill, H.R. 1. Express your concern that the bill contains provisions that will harm the charitable sector in your district by reducing charitable giving and, through the repeal of the Johnson Amendment, allowing partisanship to undermine transparency and public trust in the sector. Find your U.S. Representative’s contact information.
Your voice matters and will make a difference -- thank you for your efforts.
Questions? Contact Meredith Higashi, Senior Manager of Public Policy and Advocacy at Philanthropy Northwest.