Nonprofits oppose a cap on charitable tax deductions
United Ways and other nonprofits have been opposing a cap on the federal charitable tax deduction as a mechanism to pay for health care reform. These efforts have so far been successful in keeping a cap out of various Congressional proposals to reform the health care system.
The America’s Healthy Future Act of 2009, crafted by Senate Finance Committee Chairman Max Baucus (D-MT) does not include a cap on the charitable deduction. This bill is widely considered to be the most likely vehicle for Congressional reform efforts.
However, the Finance Committee may consider as many as 23 proposed amendments offered by its members that all include a cap on the charitable deduction. A total of 564 amendments have been submitted and only these 23 include a cap.
Although the proposed cap is more modest than one previously proposed -- 35 percent instead of 28 percent – there is concern that any cap will set a precedent for future reductions in charitable giving deductibility. What's more, a 35 percent cap, if adopted in the Senate Finance Committee, could easily be modified in a subsequent consideration by the full Senate.
Opponents to a cap are working on a multi-tiered approach including:
Working closely with a coalition of nonprofits to oppose the provisions, which was recently joined by United Jewish Communities and the American Red Cross.
Redistributing a recent letter to Congress opposing a cap that was signed by more than 400 United Ways, from every state.
Asking nonprofit and United Way CEOs from Finance Committee Senators’ states to call those Senators to oppose the cap in the Finance Committee.
Neither Senator Inouye or Akaka are on the Senate Finance Committee but Hawaii nonprofits can still voice concern about the possible cap. If you would like to weigh in on this issue, click here. Enter your zip code in the search by ZIP Code box and follow the menus to e-mail or call our Senators. If you agree that a cap should be opposed, ask them to ask their Finance Committee colleagues to oppose amendments that would cap the charitable deduction.
