Call for opposition to limit the deductibility of charitable contributions in order to balance the state budget

The NYS Senate and Assembly are considering some significant changes to the cap on charitable deductions, but have not finalized them yet…

MEMORANDUM OF OPPOSITION S 6610-B, A 9710C

The New York State Catholic Conference, United Jewish Appeal-Federation of Jewish Philanthropies and United Way of New York State urge state lawmakers to oppose a new proposal to limit the deductibility of charitable contributions in order to balance the state budget.

The proposal would result in a 50% decrease in the deductibility of charitable gifts from higher income donors. Already, earners of $1 million or more can only claim 50% of their contribution as a deduction. This proposal would allow donors earning $10 million or more to claim just 25% of their contribution.

While on the surface this may seem like an attractive idea to raise revenue, the reality is it is exactly the wrong approach. The tax penalty in this case is not being felt so much by the wealthy taxpayer, but by the charities that are the beneficiaries of his or her philanthropy.

Government has asked those with means to increase their contributions to charity to help make up for funds that government can no longer afford to provide to help the poor and vulnerable. This proposal makes it ever more difficult for individuals of means to respond to government’s clarion call to step forward and assist those in need.

Charitable agencies have seen a dramatic increase in the demand for their services by New Yorkers as a result of downturn in the economy, declines in charitable giving, government funding cuts through multiple rounds of deficit reduction, and lengthy delays in state action on contracts and payments.

This cap would reduce charitable giving and undermine our ability to help ensure that individuals and families have access to food, utilities and housing, and assistance in finding a job or an education during these challenging economic times.

America has long been defined by an endearing and powerful characteristic — its charitable spirit. Alexis de Tocqueville, the 19th-century French philosopher, described America as unique among nations for its care and compassion — part of the very fabric of our society. This core belief is embodied in our tax laws:
Basically, if you give some of your income to charity, the government doesn’t tax that income. No matter how much you earn, you are not taxed on income that you donate to those in need.

Any cap on charitable deductions means some people will be taxed on income they are contributing to advance the common good. Disconnecting the charitable deduction from the tax rate is a step toward abandoning who we are as a nation — one that lifts up and supports those in need. More importantly, as a result of a cap, some people will give less, and those who most need the help will be hurt.

We do appreciate the urgency of coming to closure on the budget and of the need to address the state’s deficit.

However, we believe that it is unconscionable that NYS would consider a proposal that could jeopardize philanthropic giving at any level, at the same time that state funding for most human services programs has been reduced over and over again, and continues to be cut in the current budget.

The three organizations urge state policymakers to reject this proposal, or to sunset it after one year, as they have done with other revenue measures.

Here are some recommendations for action for those that want oppose this:

· Faxes to Albany and district offices of state legislators and to the Governor and his team using on the joint memo of opposition (updated version attached). Ask the legislators to tell their colleagues in conference that they cannot support this proposal.

· Speak directly with your local Senator or Assembly representative about this issue

· Phone calls from major gift donors to their legislators, who they may also support with campaign contributions.

· Letters to the editor submitted electronically (for faster publication) such as the one attached to this email from the United Way of New York State.

Frank Lazarski
President
United Way of Central New York
518 James Street
P.O. Box 2129
Syracuse, NY 13220-2129
P: 315.428.2201
F: 315.428.2227
flazarski@unitedway-cny.org
www.unitedway-cny.org