Today, the Council on Foundations released the following statement from President and CEO Vikki Spruill:
“Just minutes ago, the House of Representatives passed H.R. 1, the Tax Cuts and Jobs Act. A once-in-a-generation opportunity for tax reform has been missed. The negative impacts of this bill on the charitable sector will be felt for many years to come.
“The Joint Committee on Taxation has released an analysis of the impact of the bill on charitable deductions for fiscal year 2018, and the findings are grim. Under current law, the committee estimates that 40.7 million taxpayers will claim a total of $241.1 billion in charitable deductions in 2018. However, under the just passed legislation, the committee estimates that only 9.4 million taxpayers will claim a total of just $146.3 billion. This reduction will be felt in communities all across our nation.
By doubling the standard deduction and thus reducing by approximately 25 million the number of Americans who will itemize on their taxes, this bill removes the incentive of the charitable deduction for all but the wealthiest 5% of taxpayers. This will result in billions of dollars less in charitable giving, which means billions less going to meet growing community needs.
Charities will have to cut vital programs, like the ones that provide shelter for the homeless, food for underserved school children and mental health services for the men and women who serve our country and come home needing a helping hand. This bill will ultimately harm those who depend on our social services the most.
And if that isn’t enough, the House passed bill also opens the doors for unlimited, anonymous and tax deductible political donations to flood the charitable sector. For 60 years, the Johnson Amendment has kept electoral politics out of the charitable sector and allowed civil society organizations to do what they do best; work to advance the common good. Eliminating this common-sense provision seriously endangers the integrity of our sector.
The Council on Foundations, and our members in every state in the nation, look forward to working with the Senate to do what the House did not. Pass comprehensive tax reform that strengthens our civil sector, our economy and our country.”