Washington Snapshot - July 11, 2013

Up on Capitol Hill . . .

Tax Reform

Should a newly reformed tax code raise more revenue than the old tax code?

Discussion this week has centered on whether tax reform will be revenue raising (the position reflected by Senate Finance Committee Chair Max Baucus) or revenue neutral (reflected by Ranking Member Orrin Hatch). This is, of course, the fundamental question – should a reformed tax code bring in more revenue than the current code or should it be the same?

During Wednesday’s Democratic Caucus Luncheon Chairman Baucus assured his caucus that he is committed to raising revenue. This seemed to cause some confusion with Senator Hatch who replied "as far as I’m concerned, that battle's over. We [Hatch and Baucus] both have agreed to revenue-neutrality, too, so I expect him [Baucus] to live up to that."

Senate Minority Leader Mitch McConnell (R-KY) decided to weigh in on this, too: "I don’t see how we get anywhere, candidly." For now, the Council takes this as political wrangling and we forge ahead. Articles in Politico and Bloomberg highlight this divide and analyze whether or not it is truly a roadblock to the tax reform effort.

And over on the House side, Ways and Means Committee Chairman Dave Camp (R-MI) continues to move forward. Politico outlines Camp's search for Democratic support for his proposal, with Representative Richard Neal of Massachusetts being one of the top contenders. But Neal's quest for revenue could stand in the way there, as well. Neal was also quoted along with Rep. John Larson (D-CT) on Wednesday, saying that they doubt a revenue neutral tax reform proposal would gain much support amongst House Democrats.

We expect this volley to continue, but the Council is not letting it distract us from our work on the fundamental elements of tax reform and the provisions we care about. We’re continuing our engagement with individual offices and the Charitable Giving Coalition – our partners in preserving the charitable deduction.

What about that "blank slate"?

Our last Snapshot highlighted the breaking news that Senate Finance Committee leaders Baucus and Hatch announced a "blank slate" approach to tax reform. This approach theoretically wipes the slate clean, removing all tax expenditures including things like deductions, then calls on Senators to submit proposals that justify what they think should be added back in.

Not surprisingly, this approach has its supporters and detractors, both among Members of Congress and constituencies engaged in tax reform. This Washington Post editorial captures the challenges faced by groups defending their priorities after the Senators’ June 27th announcement. Furthermore, the process is still unclear to many in the Senate, and some Republican Senators have decided not to engage at all. Those of us who have a stake in tax reform are watching with great curiosity to see how this unfolds. And, again, we are not letting this uncertainty steer us off course.

And, how's the Tax Reform Road Show going?

Chairmen Baucus and Camp’s Tax Reform Road Show stopped in Minnesota on July 8 to discuss business and small business issues in the tax code. Like many other stakeholders, we hoped that the Road Show would be conducted as a series of town hall-style meetings open to the public. The first stop in Minnesota was not, and we’re waiting for detail on future events. The next announced stop will be on July 26th in Philadelphia. We will bring you more information about this as it becomes available.

We believe the Senate “clean slate” process and the Road Shows provide opportunities for our members and other stakeholders to weigh in with their lawmakers. Next week, we'll send an action alert about ways you can voice support for the charitable deduction, including our latest email campaign and outreach to your local media.

IRS Scrutiny

The headline of this Washington Post editorial board piece sums it up – the IRS plot thickens. As new information emerges on IRS scrutiny of certain applications for 501 (c)(4) status, it appears that both conservative and progressive groups may have been culled out (although they may or may not have received the same scrutiny.)

One thing is clear: this issue is far from being resolved and we aren’t yet seeing any consensus – or even emerging trend – in Congress on how it might address the range of issues that this debacle has raised.

Chairman Darrell Issa (R-CA) of the House Oversight and Government Reform Committee will preside over the next hearing on the issue, which will reportedly focus on the relationship between IRS officials in Cincinnati and Washington, D.C., and the process they employed to scrutinize certain applications.

Out Across the Country . . .

More Great Op-Ed by Supporting the Charitable Deduction

The Sarasota Herald Tribune recently ran a compelling op-ed in support of the charitable deduction. Council members David Biemesderfer of the Florida Philanthropic Network, Teri Hansen of the Gulf Coast Community Foundation and Roxie Jerde of the Foundation of Sarasota County joined forces to co-author this great guest column. This op-ed illustrating the critical value of the charitable deduction amplifies our message and is a crucial part of channeling our message to elected leaders and thought leaders.

And, kudos to Marissa Manlove, president & CEO of Indiana Grantmakers Alliance, who posted a fabulous piece in last week’s edition of the Indianapolis Business Journal. (We’d love to share it with you, but unfortunately the publication is for subscribers only.) We applaud Marissa for identifying a local business journal to run this piece since it reaches an influential audience.

If you are interested in writing an op-ed for your local paper please contact Brian Horn.

And, if your op-ed has run, please send it our way so we can highlight your great work.

Over at 1600 Pennsylvania Avenue . . .

Are you interested in the Pay for Success program?

Pay for Success is a financing tool intended to bring together public, private, and philanthropic resources to fund preventative, evidence-based programs that save government money. The White House Office of Social Innovation and Civic Participation and the Rockefeller Foundation recently co-hosted a meeting on the program. For a recap, go to the White House blog, and look for an upcoming report. If you are curious which state, county, and city governments are considering Pay for Success, see this interactive map. For more info, contact Laura Tomasko.

Correction

Snapshot had reported last week that the Philadelphia Roadshow stop would be on July 28th, which was incorrect. The Roadshow stop in Philadelphia will be on Friday July 26th.