Conferees from the House and Senate will be meeting soon to hammer out the differences between the House and Senate versions of the Tax Cuts and Jobs Act. As the conferees meet, we urge you to reach out to your senators and representatives and ask that they protect charitable giving and the efficient operation of tax-exempt organizations in the final bill.
Although the tax proposals aim to streamline the tax code, provide tax breaks and simplify filing, we are concerned about the potentially damaging impact the bill will have on both the charitable sector as a whole and on the lower-income individuals that we serve.
Specifically, we urge the following:
- Consideration of a “universal” or non-itemizer charitable deduction in the final bill. A universal (or “above-the-line”) charitable deduction would increase giving, in terms of both donors and dollars, increase fairness by incentivizing all taxpayers to make contributions, and provide modest tax relief to middle and lower-income taxpayers as charitable contributions would not be subject to income tax.
- Protection of the state and local tax and medical expense deductions to not only protect the vulnerable populations who benefit from these provisions but enable more taxpayers to continue to “itemize” their deductions in order to claim the tax incentive of the charitable contribution deduction.
- Rejection of any changes in the current prohibition against political intervention by public charities or houses of worship (known as “Johnson Amendment”). The House-passed version of H.R. 1 contains language that weakens the “Johnson Amendment,” which currently prohibits public charities and religious organizations from endorsing or opposing candidates for public office. This provision shields charities from the rancor of politics and enables individuals to come together to solve community problems free from partisan divisions. If enacted, the inevitable result would politicize charities, encourage creation of sham organizations, and divert contributions to fund partisan organizations, undermining public trust and confidence in the charitable community.
- Continuation of private activity bonds, an important financing mechanism of Jewish Federations and partner agencies. Jewish Federations and our agencies have utilized private activity bonds as an alternative to lower the cost of access to capital. When charities are able to keep infrastructure expenditures low, additional resources can be used for charitable programs.
- Expansion of “529 Plans” to cover tuition payments for K-12 private school tuition.
A more detailed explanation of these provisions and the impact they will have can found here.
PLEASE CALL YOUR SENATORS AND REPRESENTATIVES TODAY AND ASK THEM TO PROTECT CHARITABLE GIVING AND THE EFFICIENT OPERATION OF TAX-EXEMPT ORGANIZATIONS IN THE FINAL BILL.
As your constituent, I ask you to protect charitable giving and the efficient operation of tax-exempt organizations in the final tax bill by consideration of a universal charitable deduction; protection of the state and local tax and medical expense deductions; preservation of the Johnson Amendment; continuation of private activity bonds; and expansion of 529 Plans.