Comprehensive Tax Reform: Impact on the Community

The following was released Friday by JFNA’s Washington DC office:

Yesterday, the House leadership released the comprehensive tax reform bill, H.R. 1, “the Tax Cuts & Jobs Act.” The House Ways & Means Committee has already announced that it will begin “marking up” the bill on Monday, November 6. House leadership hopes for a full House vote on the bill before the Thanksgiving holiday. The Senate Finance Committee anticipates beginning work on its version of comprehensive tax reform during the week of November 13. The goal of both the Republican leadership and the White House is to deliver a final package to the President for signature before the end of the calendar year.

Much of the tax bill impacts corporate and international taxation and while JFNA does not plan to take a position for or against the entire package, we will continue to speak out regarding charitable giving incentives and other tax provisions that impact the Federation system. While we can expect to see some amendments to the bill as the House Ways & Means Committee works on the bill next week, following is a quick summary of our advocacy position and recommendations. More detailed Action Alerts regarding specific provisions will be forthcoming.

Favorable provisions

  • Charitable contribution deduction: preserves the existing charitable contribution deduction as one of only three remaining itemized deductions
  • Increase in adjusted gross income limit on annual charitable deduction: boosts from 50 to 60 percent
  • Pease amendment repeal: eliminates limitation on itemized deductions
  • Private school tuition relief: expands Section 529 plans to cover elementary and secondary schools

Harmful provisions

  • Donor advised funds increased record keeping: imposes annual distribution and inactive fund provisions
  • Private activity bond repeal: eliminates an important source for capital project financing
  • Disability access tax credit repeal: negatively impacts the disability community
  • Johnson amendment weakening: undermines important protection for charities
  • Endowment excise tax: adds an anti-planned giving and anti-endowed giving provision

You can review a detailed memo on each of these provisions here.