After reading Albert H. Hunt’s column in The Daily Gazette “Republicans’ haste leading to flawed tax legislation”, (Nov. 30, 2017), my reaction is the column substantially understates the damaging implications of this partisan legislation proposed under President Trump’s administration.
The column fails to mention the great harm to charities and the whole nonprofit sector.
As widely reported in the press, the proposed tax “reforms” would essentially double the standard deduction thereby eliminating individual deductions by the vast majority of individuals, particularly including charitable donations.
This will profoundly impact all nonprofits in the U.S. likely resulting in loss of billions of dollars of critical funding.
This will threaten the survival of many fragile nonprofits and damage the safety net which is largely made up of nonprofits, particularly given government’s devolution of services to local communities.
My interests here are first, as father of a permanently disabled daughter named Jennifer, and also as member of the Eastern New York Developmental Disabilities Advocates (ENYDDA).
ENYDDA is an independent, all-volunteer organization founded in 2015 to advocate for disabled family members and educate the public on matters pertaining to the developmentally disabled.
I am gravely concerned, along with many other parents, with the legislation’s impacts on all nonprofits, particularly including human service providers not only in this area but across the nation.
Sure, the government and for-profit sectors are important. But it is the nonprofit sector that is largely responsible for America’s exceptionalism.
That is, charities and nonprofits fill in many of the gaps and fulfill roles that neither government, nor for profits, are remotely capable of performing, particularly relating to critical health and human services.
As noted by de Tocqueville, such institutions are responsible for our country’s most unique character.
Under a substantially increased standard deduction, the vast majority of citizens will no longer be able to deduct charitable donations as they would not likely exceed the dramatically higher standard deduction.
Yet nonprofit organizations are responsible for the very fabric of a civilized society and are an essential byproduct of our country’s longstanding freedom of association.
Given the timing and partisan back-room dealing, there may be limited actions that can be taken at this point.
However, there are steps donors can immediately take to reduce the risks of the new legislation.
While consulting with a tax professional is always recommended, donors can accelerate or expand their regular contributions or make major donations to the charity of their choice, in this tax year, before Dec. 31, 2017, before any changes in the tax law can take effect.
Secondly, given the dramatic rise in the stock market, an opportunity to discuss with a tax advisor is to donate appreciated securities.
This not only allows the deduction on the appreciated value but avoids or minimizes capital gains taxes which can be substantial.
Such actions may make particular sense to maximize benefit to your favorite charity now-- and lock in the tax savings before the next major stock market decline.
While these steps can hardly compensate for the substantial damage to charities, donors and society the GOP legislation inflicts, they at least provide some incremental benefit to charities and donors alike, and in the process all communities which depend so heavily on the nonprofit sector and the services it so critically provides.
Christopher Corbett is a nonprofit researcher and author of “Accountability and Ethics in Nonprofit Organizations” in the Global Encyclopedia of Public Administration, Public Policy and Governance (2017, Springer International). The views expressed are the author’s alone.