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Monday, November 20, 2017

Colinvaux: The House Tax Bill Could Be The End Of Charities As We Know Them

Chronicle of Philanthropy op-ed:  The House Tax Bill Could Be the End of Charities as We Know Them, by  Roger Colinvaux (Catholic):

If the tax bill passed by the House of Representatives becomes law, partisan politics would overtake the nonprofit world, casting institutions designed to promote the public good into the depraved den of identity politics and selfish motives. Charities would use tax-subsidized contributions to favor or oppose political candidates at the behest of wealthy, anonymous donors with devastating results for charities and democracy.

This is a seismic moment for the conduct of politics in America. The House bill must be changed.

Since 1954, charities have been barred from getting involved in political campaigns by a rule known as the "Johnson Amendment." It takes that name from Lyndon Johnson, who (for selfish reasons) got the rule enacted, but only after decades of debate on the issue.

Donald Trump vowed to destroy this rule at the behest of some evangelical churches that want to endorse candidates from the pulpit. Nonprofit advocacy groups responded forcefully, arguing that repeal would open the door for charities to become conduits for millions of dollars of tax-deductible dark-money political contributions, paving the way for the "charity PAC." This would occur because if the Johnson Amendment’s prohibition on politicking is removed, a charity — and only a charity — would give political donors secrecy and a lucrative tax deduction for their political speech.

Perhaps getting the message, House Republicans now propose to relax, not repeal, the Johnson Amendment. The bill just passed by the House of Representatives would let charities make political-campaign statements, but only in the "ordinary course" of their regular activities and only if the cost of the speech is not more than a small, incremental expense." According to the sponsors of this compromise, these limits ensure that "the organization’s primary function remains charitable or religious in nature." Thus, the sponsors believe, there would be no risk that charities would become PACs or that taxpayers would subsidize political campaigns through charitable contributions. ...

The Johnson Amendment has served the nonprofit world and American society well. Fortunately, the Senate bill introduced last week does not change the Johnson Amendment, so there is still a chance to defeat this measure. It is urgent that Congress be persuaded to leave the Johnson Amendment alone and protect the longstanding independence of charitable organizations and the integrity of the democratic process.

http://taxprof.typepad.com/taxprof_blog/2017/11/colinvaux-the-house-tax-bill-could-be-the-end-of-charities-as-we-know-them.html

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Comments

We need to leave our churches out of politics.

Posted by: Gator | Nov 21, 2017 6:53:59 AM

Spare me. I've served on the executive boards of a few charities, and it was a mighty struggle to keep them from being taken over by SJWs. Many non-profits already are acting as though they are PACS, and they tilt overwhelmingly in one political direction.

Posted by: gregale | Nov 21, 2017 5:06:13 PM

That would be because evangelical churches are wanting a level playing field, instead of the current situation, where Official Government Victim Group churches politic all the time with no repercussions.

Posted by: SDN | Nov 21, 2017 6:10:53 PM

Anyone who thinks the Rockefeller and Ford Foundations, hyper-partisan non-profits such as the Heinz Family's notoriously anti-American Tides Foundation (which proselytizes to "return" California and Texas to poor, benighted Mexico) are mere "charitable organizations" is very seriously misinformed.

Posted by: Lloyd Martin Hendaye | Nov 21, 2017 6:43:50 PM

The tax bill will destroy the middle class. The small change in rates and widening the tax brackets does not begin to compensate for the huge loss of deductions, especially medical deductions, and personal exemptions. The rich however will benefit greatly from the elimination of the AMT and widening of the tax brackets.

Posted by: Barbara Pietrowski | Nov 21, 2017 7:06:41 PM

The Johnson Amendment has served the nonprofit world and American society well.

Only if you consider muzzling political commentary a virtue.

Once again, in an attempt to assure the integrity of our political process, some are to be kept "more equal than others" when it comes to freedom of speech.

The best campaign finance reform, is to reduce the return-on-investment in that sector ... by limiting government to its legitimate mission of securing our unalienable rights, instead of demanding that it become the conduit of every aspect of the "common good" as it is seen on this day.

Posted by: Ritchie The Riveter | Nov 22, 2017 3:21:07 AM

There seems to be a set of solutions to this - the first amendment guarantees that charities and religious organizations should freely speak about any political activity. I find it a travesty that there are such restrictions to speech. However, these organizations have to separate any non tax deductible financing of their political activities from their charitable or religious work through a separate set of books - even registering a subset of the organization as a PAC. Contributors will have their names disclosed as just contributors to any political organization. There is nothing to keep volunteers from conducting any political activity and they can directly contribute to any other political organization as requested by their organization. However, if the organization - especially the staff - is involved in a political activity that is similar to a PAC, they have to disclose and account for such activity.

Posted by: Matthew F. | Nov 22, 2017 3:37:46 AM

Charities should be allowed to express themselves, just like any tax paying citizen. So let's make them tax paying. Conundrum gone.

Posted by: DEEBEE | Nov 22, 2017 5:54:36 PM