Rep. Kevin Brady has been tapped to serve as chairman of the House Ways and Means Committee, which crafts trade, health care, and tax policy, making it a crucial power center for issues affecting nonprofits.
Mr. Brady, a Texas Republican, will replace Rep. Paul Ryan, who was elected speaker of the House of Representatives in October. Mr. Ryan, who served as chairman beginning in February, shepherded several tax items through the committee and the House, including the America Gives More Act, but did not see major charity tax legislation signed into law under his watch on the committee.
The America Gives More Act would make permanent certain tax incentives for donating food to food banks, setting aside land for conservation, and giving to charity from individual retirement accounts, and it would also simplify and reduce the excise tax that foundations pay on investment gains.
Mr. Brady beat out Rep. Pat Tiberi, an Ohio Republican and co-chairman of the House Philanthropy Caucus for the job.
Last month, Mr. Tiberi spoke at a Philanthropy Caucus briefing, which was hosted by the Council on Foundations and Independent Sector. He retweeted portions of his speech, which included lines like philanthropy “is the backbone of America” and “giving is not liberal or conservative. It’s American.”
Some observers said the choice between Mr. Brady and Mr. Tiberi wouldn’t make a big difference when it comes to the tax treatment of charitable giving.
“Texas is a state known for philanthropy, and the entire delegation — and most notably Chairman-elect Brady — are very good friends of the sector,” said Sandra Swirski, executive director of the Alliance for Charitable Reform.
Although Mr. Brady has “great familiarity” with the work of nonprofits, he is unlikely to take immediate action on any charity tax issues, according to Sue Santa, senior vice president for public policy at the Council on Foundations.
“Any chairman of the committee will want to dive deeper and assess the issues,” she said, “That takes time.”
No Big Tax Changes Soon
Passage of comprehensive tax changes, including treatment of the charitable deduction, are a long shot until after the 2016 presidential election.
Congress is expected to act earlier on portions of the American Gives More Act in a package of what are known as tax “extenders” before the end of the year. The extenders are a group of several dozen temporary tax incentives that are usually passed each year. Congress has yet to take action on them during the current legislative session.
As they size up Mr. Brady, nonprofit leaders shouldn’t focus too closely on tax issues that “narrowly affect” foundations and charities, according to Aaron Dorfman, executive director of the National Committee for Responsive Philanthropy, who criticized the broader public-policy goals of the Republican-led House.
“Protecting the charitable deduction means nothing if it comes wrapped in an agenda that seeks to roll back tax rates for the wealthy and exacerbate inequality,” he wrote in a statement. “Winning on the tax extenders is a hollow victory if it comes at the cost of federal funding for Planned Parenthood or otherwise rolls back rights or services for the least fortunate in our society.”
