New Tax Plan Mandates Government Giveaway For Multi-Millionaires at Expense of Nonprofits, Faith-Based Charities, NCRP Says

2/4/2002

From: Sloan C. Wiesen of NCRP, 202-387-9177, e-mail: sloan@ncrp.org

WASHINGTON, Feb. 4 -- The National Committee for Responsive Philanthropy (NCRP) today raised concerns about a government proposal that would permanently mandate a special tax break for multi-millionaires and drain billions of dollars from America's charities. The amendment, S.A. 2758, may come before the U.S. Senate as early as tomorrow and would permanently repeal the estate tax paid by the richest two percent of Americans. Its passage would cost the other 98 percent of taxpayers billions of dollars annually and shrink the amount of bequests to charities each year by nearly $10 billon.

"This tax proposal is as lacking in compassion as it is devoid of common sense," said NCRP President Rick Cohen. "It is fiscally and morally irresponsible to permanently mandate a special government giveaway for multi-millionaires at the expense of America's charities and the vulnerable families they serve. If this isn't a clear case of Robin Hood in reverse, I don't know what is."

The tax proposal was offered by Arizona Republican Sen. Jon Kyl as an amendment to Senate Majority Leader Tom Daschle's economic stimulus package. A temporary estate tax repeal measure was enacted as part of President Bush's tax package last year. According to NCRP, there are several reasons that the Kyl amendment to permanently repeal the estate tax represents unsound public policy:

-- Religious charities receive the most bequests and would be hurt directly as bequests decrease. At precisely the time when the president is calling on America to strengthen faith-based charities, the Kyl amendment would rob religious charities of a key source of private support.

-- Nonprofits are struggling in this economy. NCRP has called for a nonprofit stimulus in response. Rather than stimulating nonprofits, the Kyl plan would do the opposite -- taking support away from America's charities and diminishing their abilities to meet the nation's needs.

-- The estate tax incentive generates a significant amount of charitable contributions -- more than making up for the lost federal revenues.

-- The Kyl amendment is not only unrelated to the stimulus bill to which it would be attached; its passage would be at odds with the stimulus plan, since it would hurt rather than help the economy.

-- Charitable bequests -- contributions from the estates of donors -- amount to a greater percentage of support for charities than corporate giving. These charitable bequests help sustain a wide range of nonprofit organizations -- including religious organizations, human service providers and foundations, as well as educational, medical and scientific institutions.

"Sen. Kyl's tax plan amounts to welfare for the wealthy at the expense of America's charities and the needy families they serve," added Cohen. "Sen. Kyl's special government giveaway to the richest two percent of Americans would drain billions of dollars from the hard-hit nonprofits that help the most disadvantaged among us."

NCRP is calling on concerned citizens to urge their senators to reject S.A. 2758. Senators can be called at 202-224-3121. More information on this issue can be found by visiting http://www.ncrp.org and clicking on the fact sheet entitled "Why Our Nation Can't Afford a Special Government Giveaway for the Wealthy at the Expense America's Charities."

Founded in 1976, the National Committee for Responsive Philanthropy helps the philanthropic community to advance the traditional values of social and economic justice for all Americans and to better serve the most disadvantaged American families. NCRP is a national research and advocacy organization that focuses its public-interest efforts on foundations, corporate grant makers, individual donors and workplace fundraising. For more information on NCRP, please call visit http://www.ncrp.org or call 202-387-9177.