Grassley, Young and others were focused on helping profitable corporations while nonprofit organizations may be harmed.
Iowa’s two U. S. senators and three Republican members of the House of Representatives voted to approve a tax overhaul bill signed by President Donald Trump last week. The people of this state should now be crystal clear on the priorities of their elected officials.
What do Reps. David Young, Rod Blum and Steve King value? Big corporations, real estate developers, private equity firms and multimillionaires. All will enjoy significant tax cuts under the new tax law.
What don’t these members of Congress value? The federal government, which will be starved of $1.5 trillion in revenue, and individual taxpayers, whose modest breaks are temporary. It seems charities also received a lump of coal in the tax bill.
Philanthropic entities say changes in the law will discourage middle-class Americans from donating by narrowing who qualifies for the charitable tax deduction — a driver of gifts to nonprofits. The benefit allows individuals to avoid paying federal income tax on donations if they itemize deductions on their taxes.
A provision doubling the standard deduction is expected to significantly reduce the number of taxpayers who itemize from 30 percent to 5 percent, experts say.
„The tax code is now poised to de-incentivize the heart of civic action in America,“ Dan Cardinali, president of Independent Sector, which represents charities, told the Washington Post.
One study predicts donations will fall by at least $13 billion, about 4.5 percent, next year. This is one of the reasons numerous organizations, including United Way and the U. S. Conference of Catholic Bishops, opposed the legislation.
But members of Congress refused to listen. Among them were five lawmakers from Iowa, a state where about 26,000 nonprofit organizations employ more than 11 percent of the workforce, generate more than $20 billion in annual revenue and help a lot of disadvantaged people.
Iowans give $7.2 billion to charity each year, according to Independent Sector, a membership of nonprofits and foundations.
Such generosity — and more — will be desperately needed going forward, thanks to this Congress. Washington Republicans are intent on cutting government programs and funding. That will likely leave nonprofit organizations struggling to fill voids in everything from food and housing assistance to aid for special-needs children. State budget cuts aren’t helping matters.
A higher percentage of Americans donate than vote. Gifts from individuals made up nearly three-quarters of the $390 billion donated to charities in 2016. Many of these people would likely give whether or not they received a tax benefit, but federal law, right or wrong, frequently encourages and rewards specific behavior, whether saving for college or buying a home. The benefit for charitable donations was created in 1917.
Unfortunately, many elected officials today are more focused on using the tax code to help profitable corporations and wealthy individuals while working to shrink government services to the point where charities will be needed more than ever to help disadvantaged people.
The tax bill is a reflection of the priorities of the majority party in Washington. In 2018, voters can go to the polls and express whether we share these priorities.
