Washington Snapshot: Philanthropic Organizations Push Simplification of the Private Foundation Excise Tax; Still Hammering out the Government Funding Bill

In This Week's Edition of Snapshot...

• Philanthropic Organizations Push Simplification of the Private Foundation Excise Tax
• A Rollback of the SALT Cap?
• Tax Extender Package May Pass but Won’t be Permanent
• Still Hammering out the Government Funding Bill
• Antidote for High Tensions on Capitol Hill: “Arf, Arf”
• Department of Veterans Affairs
• Happening in the States

News from the Hill

Philanthropic Organizations Push Simplification of the Private Foundation Excise Tax

The Council of Foundations and other philanthropic organizations sent a letter to House leaders asking them to include simplification of the Private Foundation Excise Tax in any year-end legislation. Under the current system, foundations can be penalized with higher taxes when they give more during times of extraordinary need such as after natural disasters. This disincentive reduces giving often when local communities’ needs are greatest. Rep. Danny Davis (D-IL) and Rep. George Holding (R-NC) introduced the bipartisan, revenue neutral bill, H.R. 4953, the Private Foundation Excise Tax Simplification Act. The bill would simplify the current two-tier private foundation excise tax to a revenue-neutral rate of 1.39 percent. The Council is asking Members of Congress to co-sponsor the legislation.

A Rollback of the SALT Cap?

House Democratic tax writers might seek to mark up a measure aimed at rolling back the $10,000 cap on state and local tax deductions (SALT) enacted in the Tax Cuts and Jobs Act, H.R. 1(115) — perhaps as soon as next month, according to lobbyists and aides on Capitol Hill.

Tax Extender Package May Pass but Won’t be Permanent

Congress could pass a one-year extension of some expired tax provisions by the end of the year, according to Sen. Ben Cardin (D-Md.) on Wednesday, a senior tax writer on the Senate side. Should this occur, the one-year extension would not provide any permanence for the provisions contained within the extenders bill and sets up an “immediate deadline to extend them yet again,” according to Sen. Carden. Among the tax credits scheduled to sunset this year are the New Markets Tax Credit and Work Opportunity Tax Credit.

Still Hammering out the Government Funding Bill

To avert a federal government shutdown on Nov. 21, Congress must agree to another short-term extension of funding. Congressional appropriators on Tuesday announced that next stopgap government funding bill would extend that deadline until Dec. 20 to give Congress more time to agree on a budget for the year. The White House has indicated that President Trump will sign this short-term spending bill, as long as it does not hinder his ability to spend money on the border wall. By Thursday, House Speaker Nancy Pelosi and Treasury Secretary Mnuchin were meeting with Congressional appropriators about how to break the impasse over funding for President Trump’s border wall.

However, Congress must also get to agreement on the spending levels for the dozen fiscal 2020 bills that will fund the day-to-day operations of the federal government. POLITICOPro reports that this may happen today or Monday. Once these subcommittee allocations, known as 302(b)s, are set, the House and Senate Appropriations subcommittees will work out the details of their individual bills, including how much to provide for President Trump's border wall.

While there is differing opinion among the Appropriations Committee leadership whether the impeachment hearings will affect the government funding deliberations, lawmakers continue to attempt to cobble together the short-term fix to keep the government open for a few more weeks. Senate Majority Leader Mitch McConnell (R-KY) and House Speaker Nancy Pelosi (D-CA) have both claimed that they will not let government funding lapse, essentially avoiding a government shutdown five days before Christmas. (Find this all dizzying? Well, find a primer on the federal budgeting process, courtesy of the Center for Budget and Policy Priorities.)

Antidote for High Tensions on Capitol Hill: “Arf, Arf”

It was reported that cute pets were available to cuddle for Capitol Hill staffers on the opening day of the impeachment inquiry, part of pet therapy day on the Hill. Maybe it also being World Kindness Day on the 13th had something to do with that?

Executive & Regulatory News

Department of Veterans Affairs

Since the nation honored the service of our military veterans this past Monday, the Council would like to add its salute to our nation’s veterans and thank them for their commitments and sacrifices.

Given the week’s reflection, we share some of the news and resources from Veterans Affairs, one of the Council’s participants in our Federal Liaisons program:

• Advancing Telehealth through Local Access (ATLAS) will now enable Veterans to be examined at their local Veterans service organization posts through virtual appointments with medical professionals across the nation.
• The National Resource Directory has more than 14,000 vetted resources available to veterans. This month’s Featured Resource: Psychological Health Center of Excellence. Psychological Health Center of Excellence (PHCoE) collaborates across the Defense Department, Department of Veterans Affairs and other agencies to improve psychological health outcomes.
• The Veterans Crisis Line can help veterans in crisis . A trained responder, many times a veteran, will respond to any form of outreach, i.e., a call, text, or email.

Happening in the States

Exclusive from our Colleagues at the National Council of Nonprofits

2019 Election Results

In addition to deciding more than 400 legislative races and three governorships in Kentucky, Louisiana, and Mississippi, voters on November 5 also approved 19 out of 32 statewide ballot measures in seven states. In Texas, two measures passed, one prohibiting the state from establishing an individual income tax and one providing temporary property tax exemptions in disaster areas. In Kansas, voters approved a measure to rely on federal census data for redrawing state legislative districts, repealing the state’s unusual policy of using its own numbers. Voters in Washington State narrowly rejected an affirmative action provision that would have expressly allowed the state to implement policies recognizing certain characteristics (such as race, ethnicity, national origin, sex, color, or age) as factors when considering a person for education or employment opportunities, while continuing to ban the use for preferential treatment. Likewise, Colorado voters rejected a proposal to pare back the austere budgeting restrictions known as Taxpayer Bill of Rights (TABOR). Had it been successful, the anti-TABOR measure would have repealed the mandatory taxpayer refund provision in the law and shifted any surplus revenues to fund public schools, higher education, and transportation.

Election Day in Louisiana is Saturday, November 16, and the House and Senate are up for grabs, although most of the seats were decided in October under the state’s unusual election law. The big contest on the 16^th is for governor where polling shows the race is within the margin of error.

State Tax Reform Forthcoming

The Utah Tax Restructuring and Equalization Task Force is considering six proposals on how to proceed in rewriting the state tax code. The official tax force recommendation would reduce individual and corporate income tax rates. The recommendations would also expand the sales tax base by imposing taxes on additional services, such as maintenance and repair of real property, fine arts schools, parking lots and garages, certain personal services, and more. A special session is expected in early December. Further east, lawmakers in Nebraska are also planning state tax reform, particularly focused on property tax adjustments. The issue, which was a sticking point last legislative session, prompted a ballot measure petition to provide property tax relief through income tax refunds or credits equal to 35 percent of local property tax liability. The legislative Revenue Committee met this week via teleconference to discuss increasing the property tax credit fund by $300 million over the next three years, which would help alleviate the potential $1.5 billion deficit the ballot measure could cause.