With yesterday’s unveiling of the Senate bill, we now have the second piece to what is a very complicated puzzle on tax reform legislation. We are mindful that your inboxes are likely crammed with alerts, updates, and calls to action. But this is critically important.
While we are pleased that the Senate bill rejects the House’s total assault on the Johnson Amendment, it still fails the sector in many important respects. It limits the charitable deduction rather than expanding it to all taxpayers by way of a universal charitable deduction. This means 95 percent of Americans will be taxed on their charitable contributions. It also limits the estate tax by doubling the current exemption. Independent Sector supports preserving the estate tax at current levels as an incentive for wealthy individuals to give more of their estate to charity.
We hope you will take a moment to review our high-level summary of the Senate legislation.
The Senate Finance Committee now has the opportunity to correct these problems through the amendment process. IS and our partners across the sector will be working with Committee members to do just that.
Like all of you, we have also spent the past week evaluating the House bill (H.R. 1). As we stated from the outset, we have profound concerns that H.R. 1 hurts charities, our communities, and the millions of families that we serve.
Yesterday’s decision by the House Committee on Ways and Means to effectively eliminate the Johnson Amendment, a 63-year-old law that protects all charities from partisan politics, is a full-out assault on the independence and integrity of our sector. The House bill also eliminates the estate tax and severely limits the charitable deduction, by making it available only to the wealthiest American taxpayers. This is simply bad policy.
Independent Sector will strongly oppose H.R. 1 because it unravels civil society in America, undercuts charities and their ability to respond to the needs of our communities, and, ultimately, widens the gap between the truly privileged and the rest of nation. This bill must be defeated.
As I wrote above, our work now focuses squarely on the Senate. We will keep you advised at key points throughout this process. Please stand by for future calls to action as we seek to mobilize organizations and individuals in the course of this process. And don’t hesitate to reach out to me or the policy team with your questions, concerns, hopes, or aspirations. We are in this as a community.
Dan Cardinali is the president and CEO of Independent Sector.