Pushing for a Universal Charitable Deduction

Tuesday, January 30, 2018

The recently-adopted federal tax reform law was not kind to charitable giving or philanthropy. In a series of visits last week with staff working for the Minnesota Congressional delegation, it was clear the negative consequence of reducing the value of the charitable giving tax deduction by doubling the standard deduction was known by all. Staff seemed to be less aware of the impact of reducing or eliminating the estate tax would have on contributions by high wealth donors. National independent sector advocates have yet to agree on a strategy for moving forward, though that may become clearer in the coming weeks as preparations are made for the annual Foundations on the Hill in mid-March. It seems a much stronger push for a universal charitable deduction will be made with the initial objective of having it incorporated into a bill in the coming six to twelve months intended to address some of the new tax law’s problems.

The Johnson Amendment repeal which would have removed restrictions on partisan, political campaigning by tax exempt organizations was not included in the tax bill. But, efforts to enact the repeal are not going away. Some expect it to be included in a revisions bill intended to make technical, non-policy correction to the recently passed tax bill. Few expect this effort to “sneak” the repeal into law will succeed. There is confidence such a provision could not get the 60 votes required to pass a technical corrections bill in the Senate, and a sense that current Senate tax committee leadership do not support changing the restriction on political activity by tax exempt groups. It appears there is now an opportunity to have a more deliberative conversation about the concerns of conservative faith groups and most other tax-exempt organizations looking at the existing 501(c)(4) IRS classification as an option for faith groups seeking to talk candidates and not just policy from the pulpit.

(MCF routinely meets with representatives from the Minnesota Congressional delegation. Minnesota grantmakers can participate in the next set of those meetings by registering for Foundations on the Hill.)

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