The Republican leaders of the U.S. House have released their tax reform bill and set a goal of Dec. 1 to have it passed and signed into law. The House is expected to vote on Thursday.
As an affiliate member of Americans for the Arts, the Arts & Business Council of Sacramento received a sobering alert from our parent organization about this proposal. For arts organizations and nonprofits in general, there would be serious consequences.
The charitable tax deduction may be severely limited for the 30 percent of taxpayers who itemize their taxes. This proposal would effectively reduce that number to 5 percent, reducing by $13 billion a year how much is donated to nonprofits, including houses of worship, disaster relief, education and the arts.
The historic tax credit is proposed for repeal. This tax credit is a widely used redevelopment tool that since 1981 has leveraged more than $131 billion in private investment, created more than 2.4 million jobs and preserved more than 42,000 historic buildings.
The Artist-Museum Partnership Act is not included. This law would allow artists to take an income tax deduction for the fair market value of their work donated to charitable institutions. Currently, while other collectors can take this deduction, artists are allowed to deduct the cost of materials.
And the estate tax is being proposed for repeal in five years. The estate tax is an important incentive for giving through charitable bequests, which accounted for about $30 billion in 2016.
Arts organizations and businesses have just begun to regain their footholds and balance their budgets after the massive economic downturn. Contact your member of Congress and let them know you oppose this tax bill and support charitable giving.
Danielle Whitmore is executive director of Blue Line Arts, which administers the Arts & Business Council of Sacramento. She can be contacted at email@example.com.