In This Week's Edition of Snapshot…
- Tax Reform Update: Senate Finance Chairman calls for input on tax reform
- Health care seems to gain steam in Senate
- HUD announces it will begin accepting unsolicited proposals for research
- In the States: Delaware charitable deduction at risk
In the coming months, we will provide weekly updates with new developments in the tax reform process.
Last Friday, Senate Finance Committee Chairman Orrin Hatch (R-UT) issued a call for input from “experts and stakeholders” on tax reform.
“After years of committee hearings, public statements, working groups, and conceptual exercises, Congress is poised to make significant steps toward comprehensive tax reform. Members from both parties have acknowledged the shortcomings of our current tax system and the need for meaningful reforms to encourage economic growth and alleviate many of the burdens imposed on hardworking taxpayers,” the Chairman states in his letter asking for submission of comments.
This call for feedback signals that the Senate Finance Committee is stepping up to become more involved in developing the substance of a bill to overhaul our tax code. Previously, the Senate had been waiting in the wings to see where the House Ways and Means Committee landed with draft tax legislation. With those efforts now delayed due to disagreement over what the primary revenue-generating provision(s) should be, the Senate tax-writing committee seems to be making their own path forward on this.
In the House, though, Speaker Paul Ryan (R-WI) asserted this week in his remarks at the National Association of Manufacturers’ Summit that he believes it’s “very much doable to get [tax reform] done by the fall.” Speaker Ryan expressed his intent to make changes to the tax code on a permanent, rather than temporary, basis. He also reiterated that the charitable deduction will be preserved alongside the mortgage interest and retirement savings deductions.
Today, Senate Republicans unveiled their draft of health care legislation aimed to repeal and replace Obamacare. According to Reuters, “The effort [to pass a health care bill] has been plagued from the start by tensions between moderates and conservatives, which surfaced again on Tuesday. Democrats have also criticized the behind-the-scenes meetings, staging a protest on the Senate floor on Monday. ‘Republicans are writing their healthcare bill under the cover of darkness because they are ashamed of it,’ Senate Democratic leader Chuck Schumer (D-NY) charged.”
Senate Majority Leader Mitch McConnell (R-KY) has stated that he wants to vote on the legislation before the July 4 recess and senators may potentially be voting on the bill next Thursday. Once Congress is finished with health care they will likely pivot to tax reform.
The Office of the Assistant Secretary for Policy Development and Research at the Department of Housing and Urban Development (HUD) announced they are accepting unsolicited proposals for research. “In accordance with statutory requirements, the research projects must be funded at least 50 percent by philanthropic entities or Federal, state, or local government agencies.” HUD budgeted about $1 million for research partnerships. Eligible participants can review HUD Research Roadmap: 2017 Update for research topics HUD is interested in focusing on in the near future.
Eligible applicants include “academic institutions, philanthropic entities, state and units of local government, not-for-profit and for-profit institutions located in the United States.” All proposals can be submitted electronically and mailed to the address listed in the announcement.
Exclusive from our colleagues at the National Council of Nonprofits.
Legislation introduced last week in Delaware would repeal the charitable deduction under state law, along with other itemized deductions. The repeal of giving and other incentives is part of a broader bill to partially overhaul the personal income tax law. Other provisions would raise tax rates, add a new tax bracket of 6.95 percent for incomes over $150,000, and increase the state standard deduction from $3,250 to $5,000 for individuals and $10,000 for taxpayers filing jointly. The bill is part of an effort to close a larger-than-expected state budget deficit.
The Delaware Alliance for Nonprofit Advancement (DANA) explained in a recent Action Alert on the issue that other states have seen the adverse impact of capping or eliminating the charitable giving incentives. Hawaii, which capped giving deductions for higher income taxpayers in 2011, removed the cap two years later due to the devastating reduction in charitable giving. It was recently reported that Michigan lawmakers are reviewing legislation to restore the charitable tax credits they eliminated in 2011. DANA reports, “It turns out the drop in individual giving resulted in government having to pick up the tab to pay for services at a higher cost to tax payers — don’t let that happen in Delaware.” See the summary, “Incent Community Investment in Nonprofits — don’t take it away.”