By Rick Cohen
A group of leading nonprofit organizations recently sent a letter to President Bush praising his leadership on behalf of nonprofits and calling on him to exercise his leadership to move the Charity Aide Recovery and Empowerment Act and the Charitable Giving Act by attaching them to two massive tax-cut bills.
One bill would authorize $146 billion in tax-cut extensions, while the other offers a nearly identical amount in new corporate tax cuts.
The letter, whose writers include Independent Sector, Council on Foundations, National Council of Nonprofit Associations and United Way of America, concludes with an unfathomable quantitative calculus:
“By expanding resources available to our nation’s armies of compassion, enactment of the CARE legislation will make us a stronger nation.”
How do the nonitemizer charitable tax deduction and the IRA charitable rollover provisions of the CARE Act offset the billions in giveaways being offered by the legislators?
The nonitemizer itself would increase charitable giving by only 4 percent, according to the Congressional Budget Office, and cost the Treasury nearly $3 billion in lost revenues in only three years, not to mention nearly $146 billion in tax relief for corporations over 10 years from the corporate tax cut bill.
Bush tax cuts will ultimately starve the budget of revenues, forcing irreversible federal program cuts in the future – cuts to the federal programs the nonprofit sector delivers.
Any suggestion that the nonitemizer and IRS rollover can replace billions in lost revenues is foolish at least, duplicitous at worst.
Bush isn’t exactly the biggest fan of the corporate tax cut bill, the fourth massive tax cut legislation in four years. Treasury Secretary John Snow has criticized the legislation for including “a myriad of special interest tax provisions.”
Why add the charitable giving incentives to the deplorable corporate tax bill?
Adding CARE to the corporate tax bill uses charity as a fig leaf, supported by nonprofit leaders, to cloak the naked greed of the corporate sector in seeking still even more tax breaks.
The corporate share of federal taxes is down to roughly 13 percent, while individuals’ share is up to nearly 87 percent, and a large slice of Fortune 500 corporations pay no taxes at all.
Why allow Congress to hide behind charity in their newest attempt to give even more tax breaks to corporations?
Because the corporate tax cut might be a winning legislative vehicle to enact the nonitemizer?
Because some foundations might be able to sneak in their version of Section 105 of the Charitable Giving Act that could result in less rather than more foundation grantmaking?
Maybe it’s a winning strategy for some of these organizations to achieve objectives long desired but narrow.
Maybe it’s the only winning strategy for a sector wrought with infighting and power struggles.
Maybe if there were better strategies and functional relationships within the sector, its leaders wouldn’t have to resort to begging for the few pennies that are left after members of Congress pay off their corporate campaign donors.
Rick Cohen is executive director of the National Committee for Responsive Philanthropy (www.ncrp.org).