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Tax Reform Efforts Starting in Congress

With limited time to act before the 2016 Presidential election season kicks into gear, Congress has begun its efforts to address comprehensive tax reform, while the Charitable Giving Coalition has sent a letter to new members of Congress encouraging them to preserve the full scope and value of the charitable deduction.

Republicans had promised that if they took control of Congress in 2014, tax reform would be their top priority, and both houses of Congress have moved to start their work.

In the House of Representatives, Ways and Means Chair Paul Ryan (R-Wisc.) focused his first hearing of the year on tax reform. In his opening comments, Rep. Ryan emphasized the need to “…make the tax code simpler, fairer, and flatter, so more people can invest and create jobs right here in America.”

In the Senate, Finance Committee Chairman Orrin Hatch (R-Utah) and Ranking Member Ron Wyden (D-Ore.) announced the launch of five separate bipartisan Finance Committee Tax Working Groups to spur congressional comprehensive tax reform efforts in the 114th Congress. 

The groups will analyze current tax law and examine policy trade-offs and available reform options within the group’s designated topic areas. Each group will be co-chaired by one Republican and one Democrat member. The working groups and their co-chairs include:

Individual Income Tax Co-Chairs: 

Senator Chuck Grassley (R-Iowa) & Senator Mike Enzi (R-Wyo.), Senator Debbie Stabenow (D-Mich.)

Business Income Tax Co-Chairs:

Senator John Thune (R-S.D.) & Senator Ben Cardin (D-Md.)

Savings & Investment Co-Chairs:

Senator Mike Crapo (R-Idaho) & Senator Sherrod Brown (D-Ohio)

International Tax Co-Chairs:

Senator Rob Portman (R-Ohio) & Senator Chuck Schumer (D-N.Y.)

Community Development & Infrastructure Co-Chairs:

Senator Dean Heller (R-Nev.) & Senator Michael Bennet (D-Colo.)

Coalition Letter

The Charitable Giving Coalition, chaired by AFP, began its education efforts by sending a letter to all new Representatives and Senators, discussing the importance and impact of the charitable deduction and other giving incentives.

In the letter, the Coalition provides statistics on how powerful the charitable deduction is in terms of increasing giving: “A calculation of the deduction suggests that those in need receive $2.50 of benefit for every $1 of tax benefit going to the donor.”

The letter also discusses the impact of philanthropy and the nonprofit sector on the United States, with one out of every ten workers new employed by the sector.

“With so many new members of Congress, and such a short window of time to accomplish things with the upcoming election, it’s imperative that we get started quickly in our advocacy efforts this year,” said Andrew Watt, FInstF, president and CEO of AFP. “There are so many factors in play, and there’s no guarantee that the deduction won’t be altered significantly through Congress’ work. The Coalition will be very busy this year, and AFP will be calling on members to help out as well by contacting their local Representatives and Senators.”

The full Coalition letter can be found here.

AFP and the Charitable Giving Coalition will be closing monitoring the debate over tax reform and will be updating members consistently over 2015.

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