The moment the charitable sector has been dreading has finally arrived. We’re facing a Senate tax reform bill that will devastate charities and the people we serve. If it passes, we have run out of options to prevent our sector from hemorrhaging billions of dollars and are incapable of meeting the increased need that will result from tax reform. Our backs are against a wall – and we have to come back swinging.
What We’re Up Against
Earlier this week, Ways and Means Chairman, Kevin Brady (R-TX), asserted that charitable giving will increase after tax reform. Unfortunately, he has no data to back up these claims. Instead, we know from multiple studies that giving will decline by at least $12 to $20 billion. (Here are two: Tax Policy Center & Tax Policy and Charitable Giving) Just this one policy change could result in the sector losing 220,000 to 264,000 jobs, according to Joseph Cordes with George Washington University. Senate Minority members of the Joint Economic Committee published an analysis this week that breaks down by state estimated declines in giving due to the Senate bill, concluding that it “squashes nonprofits.”
Charities will take additional financial hits in tax reform, because the House and Senate bills eliminate other policies that incentivize giving and capital investment, while also increasing taxes on charities.
Unfortunately, the negative impacts of these bills extend beyond charitable organizations to include some of the most vulnerable people in our communities. Both the Joint Committee on Taxation and the Congressional Budget Office report that the Senate bill will harm low- and middle-income households. Households earning less than $40,000 would see a tax increase within five years and households earning less than $75,000 would see a tax increase within ten years. The findings also show that up to 13 million Americans will lose their healthcare as a result of tax reform, either by no longer being covered by Medicaid/Medicare or no longer being able to afford private healthcare due to increasing costs.
What You Should Do Now – Swing Away
We have less than 48 hours to defeat a bill that will fundamentally change our organizations and our communities. The time to act is now. Telling your Senator exactly how tax reform impacts your organization and the people you serve is the most powerful message you can send. Independent Sector asks you to tell your Senators to vote “no” on the tax reform bill.