April 16, 2012; Source: Alliance for Charitable Reform Blog
The denouement of the Buffett Rule proposal suggests that the nonprofit sector has a stake in tax policy regardless of whether the charitable deduction, the sacred element of recent national nonprofit advocacy, might be at stake. By most accounts, the Buffett Rule vote was an exercise in politics, not policy, as it had no chance of being enacted by the Republican-controlled House or by the less-than-60-vote Democratic Senate, and as predicted, it fell in the Senate by a vote of 51 to 45. Had the Buffett Rule been enacted, tax deductions for million dollar earners would have been in jeopardy—except for the charitable deduction, which the Obama White House pledged to leave intact, perhaps an indication that the charitable deduction is the least-objectionable deduction (or the deduction most beneficial to society) afforded to very wealthy taxpayers. It was unclear, as the NPQ Newswire previously noted, how the White House could exempt the charitable deduction from the Buffett Rule while continuing to propose a 28 percent cap on other high income (but less than million dollar) taxpayers. In any case, the charitable deduction was not in jeopardy with the Buffett Rule.
Nonetheless, the Alliance for Charitable Reform (ACR), a public policy advocacy organization affiliated with the Philanthropy Roundtable, an association generally consisting of conservative-leaning foundations, came out against the Buffett Rule. On April 16th, the ACR blog stated, “ACR believes that entrepreneurship and wealth-creation is vital to sustaining charitable giving. A minimum tax levied on high-income earners ultimately leaves them with less to give and it is these Americans that, study after study has shown, give the most.” In other words, the argument goes, making the tax structure more equitable by increasing taxes on the superwealthy so that people like Warren Buffett pay at a rate no lower than their working class secretaries undermines entrepreneurship, wealth-creation and philanthropy driven by the very rich.
The proposed Buffett Rule is based on the notion of creating a tax structure that is more fair, that gets the superwealthy to pay at rates equivalent to or higher than middle income working people. The ACR position is to protect very high income earners from higher tax rates because lower taxes for the rich means that they have more disposable income that they might—might—give to charity and philanthropy. What about the rest of the nonprofit sector? Leaving aside the political theater of the Buffett Rule, how do NPQ Newswire readers feel about the Buffett Rule itself? Should the superwealthy be afforded lower tax rates to help them accumulate more wealth, some of which might go to charity, or should nonprofits advocate for a tax structure that would make those with the means pay more, even if it leaves millionaires with somewhat less money in their accounts?
One more question: Since ACR had the courage of its convictions to stand against the Buffett Rule in the name of charity and philanthropy, what did the other national nonprofit and foundation trade associations say—if anything—for or against the Buffett Rule?—Rick Cohen