The New York Times reports (12/2/10) that “Pandora’s Box” has been open. “With the federal government struggling to regain control over the nation’s deficit, a debate is emerging over the charitable deduction and other tax policies that support nonprofit groups”.
A number of Administration and blue ribbon panels are exploring different approaches to generate revenue in ways that may soon affect tax-exempt organizations. The article quotes Diana Aviv, President of The Independent Sector, who, while making the rounds in Washington has heard three schools of thought about tinkering with the charitable deduction.
“One is convinced that donors are not influenced by the deduction. Another is that charitable gifts too often go to museums, universities and health research instead of human services organizations, while a third sees getting rid of the deduction as a way to lower the deficit and simplify the tax system”
“When you pull these different impulses together, I think what you have is the makings of a potential change in this area in a way we haven’t looked at it in a very long time,” she said.
The Independent Sector is currently encouraging its members to act to protect the estate tax. It is encouraging members to ask their elected officials to oppose any effort to weaken the estate tax beyond 2009 level of $3.5 million and a tax rate of 45 percent.
Read the full NY Times article here and learn more about legislative initiatives currently under consideration in Congress.
