CalNonprofits Articles

As we've written before, the tax plans being voted on in Washington DC are troubling.

We remain as worried as ever.

Both the House and Senate tax plans benefit wealthy individuals and corporations at the expense of middle- and low-income families, nonprofits, and the communities we serve.

California will be severely damaged if the bill passes.

Because the House and Senate passed bills that are not the same, they now need to work out these differences. So tax reform is not over yet. That means there is still time to act.

And if you think California votes don't count, think again.

Some Republicans may be willing to vote against this terrible bill. Already, three California Republican members of Congress voted against the bill in the House: Dana Rohrabacher (R-Costa Mesa), Darrell Issa (R-Vista), and Tom McClintock (R-Elk Grove). And our U.S. Senators can help raise the alarm on issues that may be more dangerous for senators in other parts of the country.

Because the timeline for a next vote is still not known, but could come up quickly, we urge you to contact your Congressmember and our two U.S. Senators now.

The simplest and best way is to telephone your Congressmember and Senators.

1. Call the Capitol switchboard (202-224-3121) and follow the prompts to be connected with the office where you want to leave a message. It will take about 2 minutes. To find out who your Congressmember is, click here and input your nonprofit’s (or your) zip code in the upper right corner.

2. Once connected, identify yourself as a someone who lives and/or works in their district.

3. Message: Choose an issue or issues you are most worried about, such as:

  • "The tax bill you are about to vote on would hurt me and my community. Please vote no on it."
  • "I volunteer for a nonprofit and the tax bill would greatly hurt their ability to serve seniors."
  • "Do not use tax reform to weaken or repeal the Johnson Amendment, which keeps divisive partisan politics out of nonprofits."
  • "Eliminating all tax-exempt bonds will make housing even less affordable in my community."
  • "Not allowing us to deduct state and local taxes from our federal taxes hurts all of us in California."

For more background on issues of concern, keep reading.

State and Local Taxes:

Both the Senate and House versions would repeal the deduction that allows taxpayers to write off state and local income tax they paid each year, as well as put a cap on the property tax deduction.

More than six million Californians take advantage of the state and local tax deduction each year, deducting an average of $18,438 per family, according to the nonpartisan Tax Policy Center.

The California Republicans who voted against the tax bill said that eliminating this tax break was not acceptable because it targets Californians, who pay relatively high state taxes. As Rep. Issa explained, “I didn’t come to Washington to raise taxes on my constituents and I do not plan to start today.”

House Version Threatens to Cripple Nonprofit Building Projects and Make Housing Even Less Affordable

The House bill would eliminate all tax-exempt private activity bonds, while the Senate bill keeps it. These bonds are used to finance more than half of the affordable units built each year, according to the National Council of State Housing Agencies.

Eliminating them would also hurt other nonprofits, including schools, hospitals and museums, who use these bonds to finance building and renovation projects.

The Johnson Amendment – Nonprofit Nonpartisanship

While the Senate tax bill preserves nonprofit nonpartisanship by leaving current law intact, the House version would weaken the existing law. More than 5,500 organizations nationwide, along with thousands of religious leaders, faith organizations, law enforcement, and the vast majority of the general public, oppose weakening the Johnson Amendment.

Standard Deduction and Charitable

Giving Both the House and Senate versions of the tax bill would increase the standard deduction, resulting in only 5% of taxpayers (currently 30%) itemizing and therefore able to take advantage of the charitable deduction. If enacted, the charitable deduction would be out of reach for 95% of taxpayers.

You can see a detailed comparison of the House and Senate bills here.

This is likely our last chance to have a say on tax reform. Please don’t wait to register your concern.

Click here to find your Congressmember

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