News from the President 9.29.17

By Susan Shattuck, AFP-NYC President

 

Orrin Hatch, Chair of the Senate Finance Committee sent a letter in late July to AFP and other “stakeholder groups” for comments and ideas regarding tax reform.  Jason Lee, AFP interim President and CEO, submitted recommendations for expanding the IRA Rollover provision and for creating the universal charitable deduction to strengthen Philanthropy in America.

The IRA Rollover allows taxpayers age 70½ or older to transfer funds up to the amount of $100k directly from their IRAs to a charitable organization and not be taxed.  AFP recommended removing that cap, lowering the age to 59½ for donors, and also permitting the creation of planned gifts through a rollover.

A universal charitable deduction would allow all taxpayers, whether or not they itemize deductions on their taxes, to take a deduction for their charitable giving during the year.

There are other, less positive reforms being proposed as well. Research from Independent Sector and the Lilly School of Philanthropy at Indiana University show how different reform proposals would decrease giving.  Expanding the number of taxpayers who can take the standard deduction would reduce giving by almost $11 billion a year. Adding the proposal to reduce the highest marginal tax rate to 35 percent would bring the reduction in giving every year to $13 billion.

However, including the universal charitable deduction with the other two provisions results would increase overall giving by close to $5 billion a year.  Jason Lee also noted “should the universal charitable deduction be approved without the other two provisions, giving would increase by over $12 billion a year.”

As we know, the President recently revealed his tax plan, put together by six Republican leaders.  The IRA Rollover expansion nor the universal charitable deduction appear to be included as of now.

This is just the beginning. I can assure you that AFP, along with the Charitable Giving Coalition and others will continue to strongly advocate for these initiatives.

 

 

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