Our hearts and prayers go out to all those affected by the tragedy in Boston this week. Amid the horror, the American spirit of giving has been on full display as complete strangers have offered up their homes, their blood, their money and resources to help those in need. We hope for a speedy healing process for all those who have been physically and emotionally afflicted by this senseless tragedy.
This week in Washington all eyes were on the Senate as Members addressed gun control and immigration. Earlier this week the Senate voted down legislation that would require background checks before purchasing firearms. Also, earlier this week it was announced that a small, bipartisan group of Senators had struck a deal on an immigration reform package
that will be taken up for debate in the Senate next week. Also in the headlines was the President’s budget and its impact on donors and charitable giving. And behind the scenes Congress’s tax-writing committees toiled away on tax reform efforts.
>> President's Budget and Reaction from the Hill
>> Finance Committee Continues Tax Reform Effort
>> New Bill to Protect Charitable Giving
>> Ways and Means Committee Wraps Up Working Groups
President's Budget and Reaction from the Hill
As you
know, President Obama released his FY2014 budget proposal on Wednesday, April 10th. Again this year he called for a 28% cap on all itemized deductions, including the charitable deduction, for the top 2% of taxpayers. The proposal is the same as it’s been for the past 4 years, but because the tax rates have increased as of January 1st, the impact of the 28% cap is much greater – which means the hole in charitable giving created by this proposal is much deeper. How much deeper? Numbers have ranged anywhere from $6 billion to $11 billion in potential losses to charity. This is based solely on the cap and the new difference in tax rates and does not take into account other factors that
may impact giving. ACR again, as in years past, opposed this proposal and we continue to work with our Charitable Giving Coalition partners to have our voices heard in Congress about the importance of the charitable deduction. ACR also signed a letter the Coalition sent to the President asking him to reconsider his plan to cap the charitable deduction.
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Finance Committee Continues Tax Reform Effort
On Thursday April 11, the Finance Committee released the second options paper as background for their second closed door session on tax reform. This paper examines options relating to Business Investment and Innovation and can be viewed here. A third paper
was issued Thursday, April 18 that discusses ways to reshape education and family policies in the tax code. According to a summary, this paper lists marriage penalties and bonuses, the rising cost of higher education, and simplifying dependent tax credits as possible areas for reform.
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New Bill to Protect Charitable Giving
New Bill to Protect Charitable Giving Last week, Representatives Jim Sensenbrenner (R-WI) and Jim Matheson (D-UT) introduced a bill, H.R. 1479, that would carve out the charitable deduction from being subjected to the Pease
limitation. In a press release, Congressman Sensenbrenner said “Charitable deductions should be exempt from political attack as we work to restructure our tax code. Americans appreciate the significance of our philanthropic sector as charity is engrained in America’s moral fiber. We must continue to encourage communities to take care of one another rather than instill ever-growing reliance on government.”
We applaud this bi-partisan bill and look forward to working with their office and our colleagues in the sector to advance this legislation.
Ways and Means Committee Wraps Up Working Groups
The Ways and Means Committee’s process to gather input from the public drew to a close on Monday, April 15th. By that date, the public was invited to submit comments on tax reform through a web portal (click here for ACR's press release.) The work being done by each of the 11 Ways and Means Working Groups on Tax Reform also concluded on Monday.
Well over 100 documents were submitted through the web portal, including one from ACR.
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