CalNonprofits Articles

Tax Reform FireA controlled burn is good for a forest. It clears out dry brush, reduces fire hazard, and encourages a diverse, healthy ecosystem for animals and trees. In contrast, a wildfire – well, ask the people in the wine country counties: a wildfire is an unpredictable, raging force that can take lives, devastate homes and jobs, and leave land at more risk for erosion and flooding.

Our analysis of the proposed tax bill in Congress is that it's a wildfire coming straight at California – particularly California's middle class and disadvantaged communities. It must be stopped before it ravages our state.CalNonprofits’ recent survey about nonprofits adapting under Trump administration revealed that nonprofits are more worried about their communities and constituents than earlier this year. Both the House and Senate tax plans, which are scheduled to be taken up in the coming days, should make them even more worried.

The House and Senate tax plans benefit wealthy individuals and corporations at the expense of middle- and low-income families

While promising to streamline the tax code and reduce taxes for the middle class, both versions would shift resources away from low- and moderate-income people while giving major tax breaks to high-income people and wealthy corporations – dramatically increasing inequality in our communitiesSimilarly, even though both bills keep the charitable deduction, they move the deduction to where only wealthy donors would benefit from it. In fact, these proposals would restrict those who itemize deductions to only the wealthiest 5% of taxpayers, making it harder for 95% of taxpayers to make donations.

Bigger deficits mean deeper cuts to federal programs

The proposed tax plans would reduce tax dollars by the trillions, and potentially lead to dramatic increases in the deficit. That would put pressure on Congress to cut programsHand holding California that middle- and low-income families rely on, from highway repair, Medicaid, and housing to public education, medical research, and other services.For nonprofit organizations, cuts in federal programs mean cuts in contracts to nonprofits in human services, health, housing, the arts, and the environment. With one in every sixteen California jobs at a nonprofit, these cuts could translate to layoffs at nonprofits, fewer services to communities, and thousands more unemployed. California would also be disproportionately hurt by the tax bill. This New York Times article even quotes San Diego Republican Darrell Issa:  “I cannot endorse changes that may make the tremendous burden felt by California taxpayers even worse,” he said. “Tax reform should lower taxes for all taxpayers — regardless of where they live.”

Nonprofit nonpartisanship is being attacked under the guise of the House tax plan

The House Ways & Means Committee made a last-minute change to its tax bill that would weaken Johnson Amendment protections for all 501(c)(3) organizations by allowing them to engage in partisan electioneering.In effect, nonprofits – including churches and houses of worship – would be vulnerable to becoming pass-throughs for dark money by donors pressuring us to support particular candidates. People who support the work of nonprofits rely on us to use their donations to help our communities, not engage in electioneering. The nonpartisan Joint Committee on Taxation (JCT) estimates that the provision would cost the federal government $2.1 billion over just six years because donors would divert their currently nondeductible political campaign donations to churches and nonprofits in order to claim charitable tax deductions.

Take a closer look

CalNonprofits policy framework states, “We support government budget and fiscal policies that provide sufficient resources to equitably and adequately meet the needs of Californians.” The House and Senate tax proposals don’t meet this standard. While the bill has been in the House Ways & Means Committee, we have contacted our members in the districts of the four California House members who sit on that committee, encouraging them to call their Representatives and amend the bill to make it fairer.As the bill moves to the full House and Senate, every one of California's 55 members of Congress holds a crucial vote. We hope our elected officials will reconsider their plans, and pass a tax plan that helps, not harms, the general welfare of Californians.


0 # Edward Landler 2017-11-20 17:52
Both the House and Senate tax bills are unconscionable as serious efforts to "reform" our taxes. Both bills are clear statements that the majorities in both houses of our Congress believe that we are a government of the rich, by the rich and for the rich... and should even be more so.
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