During the question and answer portion of the session, Elder Oaks also expressed his concern with the message that would be sent by any impairment or limitation to the deduction. "If the charitable deduction is modified in substance — not in the details, but in the substance — that will be a teaching message that charitable works are less important in our view than the works of government. It is that message that I speak against."
To read Elder Oaks' full remarks, click here.
Hatch made introductory remarks to the session, during which he noted that "the charitable contribution begins with the first dollar given. We should rejoice that we live in a country where people of all income groups give generously to charity."
He added that the charitable giving deduction is "the only deduction that encourages you not to spend or invest your income, but to give it away," and concluded that "we curtail the charitable tax deduction at our peril."
To read Hatch's introductory full remarks, click here.
Also addressing the Finance Committee during the hearing were:
Frank Sammartino, a 20-year veteran with the Congressional Budget Office, and currently that organization's assistant director for tax analysis. His remarks articulated how the CBO has looked at 11 different options for reforms to the charitable deduction. He indicated, however, that it was not his place nor the place of the CBO to make specific recommendations.
Dr. Eugene Steuerle, is a noted economist and the Richard B. Fisher Chair and Institute Fellow at The Urban Institute, a Washington, D.C.-based "think tank" focused on nonpartisan economic and social policy research. During Steuerle's brief presentation he described a number of different adjustments that could be made to the charitable deduction that he felt would both maintain charitable giving and still help reduce the budgetary shortfall. While he acknowledged the benefits to society of the deduction as it now functions, he said "we have to deal with the budgetary shortfall now. There's no better time for dealing with this than right now."
Brian A. Gallagher, president and CEO of United Way Worldwide since 2002, said that after 30-plus years working with benevolent donors in the private sector, "I know why people give." He said that charitable causes are reliant upon large donors for a significant portion of their income, and if they are limited in what they can donate it will definitely have impact on the bottom line for all charities. "At a time when all manner of government programs are being cut, decreasing the amount of donations going to charities is the wrong thing to do," Gallagher said.
Roger Colinvaux, associate professor at The Catholic University of America, Columbus School of Law, is a nationally recognized expert on tax matters relating to nonprofit organizations. During the session he spoke mostly about the deduction as a matter of law. He recommended that an effort be made to "de-link the deduction from tax exemption." While this would be a difficult process, he acknowledged, it would "force more conversation about what the deduction is for, and allow us to look at which sectors of the deduction are worthy of support."
Watch and read the testimonies of members of the Senate Finance Committee and others,
which are also posted on the Senate website.
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