Washington Snapshot: Impact of Tax Reform on Charities Still Unclear, Additional Tax Cuts Not Likely This Year
In This Week's Edition of Snapshot…
- Impact of Tax Reform on Charities Still Unclear
- Additional Tax Cuts Not Likely This Year
- Issues on the Minds of Candidates and Voters
- Voter Education Made Easy
- Election Resources
POLITICO Morning Tax recently addressed our sector’s concern over the impacts of the 2017 tax bill on charitable giving. According to the article, “When the Tax Cuts and Jobs Act was signed into law last year, many charities worried that some of its provisions would take a big bite out of contributions. They reasoned that the near doubling of the standard deduction and a cap on the state and local tax deduction would lead to a drop-off in itemizing and lessen the appeal of charitable giving. So, with the end of the year approaching, what has been the experience of the charities themselves? The outlook is cloudy and may remain so for some time.”
The article notes that once the data is available—which may be a year or more from now—it will likely show a decrease in charitable donations from low- and moderate-income donors. While it is unlikely that tax legislation will be taken up during the remainder of the 115th Congress, the Council is prepared to work closely with the 116th Congress in support of a universal charitable deduction and other Council priorities in order to maintain the strong tradition of incentivizing charitable giving by all Americans.
Last week, talk of an additional “major tax cut for middle income people” by President Trump took many by surprise, but Republican leaders in Congress seem to be rolling with it. “We expect to advance this in the new session of Congress if Republicans maintain control of the House and the Senate,” House Ways and Means Chairman Kevin Brady (R-TX) shared in an interview. Chairman Brady continued, “What President Trump is looking at is a 10-percent cut focused on middle class workers and families for this reason: he still believes middle class families are the ones always in the squeeze.”
It is still not clear how any of this might tie in with the “tax cuts 2.0” legislation that was passed by the House in late September. In any case, Chairman Brady has not been shy about how he hopes to see the legislation progress. As reported by BGov, “‘That legislation is “now over in the Senate, and I think permanence really depends on this election,’ Brady said in an Oct. 28 interview on Fox News. ‘If Republicans retain control of the House and the Senate, next year we will do reconciliation and make these tax cuts permanent.’ Reconciliation is a process that allows lawmakers to advance legislation with a simple majority so long as certain requirements are met. This was the same route Republicans took to enact the initial tax overhaul at the end of 2017 without the support of Democrats.”
Exclusive from our colleagues at the National Council of Nonprofits.
Issues affecting foundations, nonprofits, and the communities they serve are at the center of debates for various public offices across the country. Similarly, the outcomes of local and state ballot measures often affect the work of nonprofits. Here are some samples:
- Taxes: A candidate for Massachusetts Governor is seeking to tax the endowment returns of higher education institutions by $1 billion to pay for his spending promises. A mayoral candidate in Chicago is looking for $100 million in payments in lieu of taxes (PILOTs) from nonprofit landowners in the city as part of a $1.7 billion revenue package. The Chicago Tribune reports that the candidate “pointed to a program in Boston that had been successful in using the power of mayoral persuasion to get such nonprofits to kick in money.” Thirty-six ballot measures relating to taxes are on the ballot in 19 states.
- Medicaid Expansion – or Not: The midterm elections could bring sweeping changes to Medicaid, from possible expansions of eligibility to new rules requiring low-income people to work, depending on voters' choices for governors' offices and state legislatures across the country. Some rural communities may rely on Medicaid expansion as their only hope to keep some hospitals financially viable. Four states (Idaho, Montana, Nebraska, and Utah) have ballot measures pertaining to expanding or funding for Medicaid.
- 2020 Census: Census data is used by the government for a decade, so inaccurate population counts can cause communities to suffer at every level as flawed data leads to funding cuts, misinformed business-planning decisions, and improperly drawn electoral districts. In 2019, elected officials at every level will decide whether to fund special census count efforts for 2020 and establish complete count committees or commissions to ensure a full, fair, and accurate count of every resident.
Every ballot is different, so how are voters to know who and what they’ll be voting on on Election Day? There are nonprofits for that. The League of Women Voters' Vote 411 tool provides up-to-date information on polling locations and local ballots. Just enter your location information and see everything relevant to the elections in your area. Similarly, the Ballot Ready tool creates a personalized, interactive ballot based on your voting location to inform you of the issues and candidates you will be voting on.
- Governors: 36 seats at stake (Governing)
- Municipal elections across the United States (Ballotpedia)
- Attorneys General: 30 seats at stake (Governing)
- 2018 Legislative Races by State and Legislative Chamber (National Conference of State Legislatures)
- November's Most Important Ballot Measures, Governing, October 3, 2018, providing commentary and a recap of the 154 ballot measures in 38 states.
- Candidates Answering Nonprofit Questions (National Council of Nonprofits) featuring responses to nonprofit questionnaires by candidates for governor and legislatures in Colorado, Maine, North Carolina, and Wyoming. See also responses by Pennsylvania candidates.