Wednesday, November 7, 2018
Thanks to my co-bloggers Lloyd Mayer and Darryl Jones for the excellent posts yesterday on Election Day related material. Reading their posts got me thinking about yesterday’s results, and specifically how they might impact charities. Clearly, I think we will see some impact on the tax side of the charitable world. With the new Democratic majority in the House of Representatives, it appears that Richard Neal of Massachusetts will take over as the Chairman of the House Ways & Means Committee. In addition, apparently a number of Republicans who were on the Committee who wrote the TCJA either retired or were defeated, which should result in significant turn over on the Committee.
Most news coverage this morning is centering on whether the House will now request President Trump’s tax returns, but it is easy to forget that Tax Reform 2.0 is pending, as well as the potential for additional middle-class centered tax cuts. For example, it appeared that the House was strongly considering making permanent some of the individual tax cuts that sunset in 2026 under the TCJA – specifically including the changes to the standard deduction, the personal exemption, and the SALT cap – that potentially impacted the tax incentives for charitable giving. One guess is that the SALT cap (see my brief post on this from Monday) might be ripe for change and politically popular, even among some Republicans. My gut tells me there probably won’t be changes to the executive compensation excise tax, but maybe to the college and university endowment tax – those may be a matter of making the numbers work. And finally, although it didn’t make it into the TCJA, I also wonder if this stops any momentum to change the Johnson Amendment. I’ll be curious to see if some of the recent language that has made it into the annual budget acts limiting IRS authority with regard to enforcing the Johnson Amendment will remain in future acts.
But these are just my Wednesday random musings over my first (and second) cups of coffee (and of course, your results may vary and these are my own thoughts, etc. etc.) – I’m wondering if anyone see the potential for any other, especially non-tax, impacts.