This bears watching as the two houses of Congress come together to hammer
out a final bill. YOU, as museum employes, CAN contact your Congress people
and let them know how much those charitable donations will impact your
museum and its activities. It WILL NOT affect your 501(c)3 to do so because
it is within the scope of your mission.
The Latest Tax Bill ActionEarly Saturday morning, the U.S. Senate passed a
tax reform bill along an almost exclusively party-line vote of 51-49 with
all Republicans voting yes, except for Senator Bob
*The Latest Tax Bill Action* Early Saturday morning, the U.S. Senate passed
a tax reform bill along an almost exclusively party-line vote of 51-49 with
all Republicans voting yes, except for Senator Bob Corker (R-TN), who
opposed it for the $1.5 trillion in debt that would be created.
In a rush to pass far-reaching tax reform before year-end, both the House
and Senate have passed separate but similar tax bills. *Unfortunately, both
versions of the tax bill would have a very negative impact on charitable
giving. *The bill now moves into a joint conference committee to negotiate
a final, unified bill that can be signed into law by the President. It is
anticipated that the ability to include any new provisions at this point
will be severely limited, if not impossible. *What is the Status on
Charitable Giving?* Because both the House and Senate tax bills propose
doubling the standard deduction, access to specific incentives for income
tax deductions of gifts to charity become severely limited to only the top
five percent of taxpayers who itemize their deductions. Americans for the
Arts and the charitable sector had actively supported the idea of a Universal
Charitable Deduction
<https://www.votervoice.net/BroadcastLinks/FRClauOhJrNvB1FikZDlfw> so that
the incentive to give to charities would be available to both itemizers and
non-itemizers. However, Universal Charitable Deduction proposals offered by
Rep. Mark Walker (R-NC) and James Lankford (R-OK) never made it into the
final bill nor were given an opportunity for a floor vote.
Unfortunately, the nonpartisan Tax Policy Center estimates that charities,
including nonprofit arts organizations, could see a staggering loss of up
to $20 billion annually
<https://www.votervoice.net/BroadcastLinks/076ZR9m5K6lipFmpQ4mwSA> as a
result of this tax policy change.
Data shows
<https://www.votervoice.net/BroadcastLinks/AbQ3yx8p-CVc4Al_fVCSQg>
that the *charitable
deduction under both bills also will no longer be viable to 95% of all
taxpayers *because of the expansion of the standard deduction. That means:
- 31 million taxpayers who currently claim the charitable deduction will
lose it.
- Charitable contributions will decline by up to $20 billion per year.
*What Do the Bills Mean for the Arts?* We are still reading through the
latest proposals. Although there are some differences between the two
bills, both bills overall fail the arts and cultural sector. Here is a
preliminary summary of some of the other provisions in addition to the
expected reduction in charitable itemizers that we’ve identified impacting
artists and the nonprofit sector.
*U.S. House Bill* *U.S. Senate Bill*
Eliminates the performing artists’ business deduction No such elimination
Eliminates the $250 deduction for teacher supplies and instructional
materials Doubles the same provision to $500
Reduces estate and gift taxes by doubling the exemption and then ultimately
fully repealing the estate tax (historically a generator of major
charitable gifts) Reduces estate tax by doubling the exemption
Repeals the "Johnson Amendment" prohibition on tax-exempt organizations'
support for political campaigns, without causing them to lose tax-exempt
status No such elimination
Repeals lifetime education credits, tax deduction for interest on student
loans, and tuition waivers from income for graduate and PhD students No
such elimination
Increases limit on cash contributions to qualified charities from 50% to
60% of adjusted gross income. However, this only applies to the narrowed
group of donors who can itemize their taxes. Same
Repeals income tax exemption for private activity bonds, often used to
finance cultural infrastructure projects, like museums No such elimination
We will continue to keep you updated as the work continues. In the
meantime, thank you for your support of the arts. Be assured that we
continue to work to ensure that changes made under tax reform will
encourage more giving by more Americans, and protect the civic
infrastructure upon which our communities depend.
Thank you for helping to #ProtectGiving
<https://www.votervoice.net/BroadcastLinks/Qx8RstdgMw2n0VZ_BYwN4A>.
------------------------------
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