TALKING POINTS devastating when late-year emergencies or disasters occur. WE ASK YOU TO A higher grant payout this year to assist farmers impacted by SUPPORT H.R. 644, drought in California, for example, will make it much more THE challenging for the foundation to qualify for the lower tax rate AMERICA GIVES during the next 5 years. MORE ACT OF 2015 A single rate for all private foundations would greatly simplify This bill, which was compliance, improve efficiencies, and remove disincentives. A flat rate of 1% would certainly be simple to administer. passed by the House on We are open to considering alternative rates, but would find it February 12th, would difficult to support a rate that is used primarily as a revenue- simplify the excise tax to raising mechanism. a flat rate of 1%. The President has included a single-rate simplification of 1.35% in past Budgets, including the recently-released Fiscal Year 2016 Budget. PRIVATE FOUNDATION EXCISE TAX For more than a decade, we’ve been asking Congress to simplify the private foundation excise tax to a single rate. The current excise tax is extremely complicated and requires extensive time and resources to calculate. It has become a real management challenge because its complex, two-tier structure and the inherent uncertainties in precisely calculating net investment income by year’s end. Consequently, the rate structure actually serves as a disincentive for increasing grantmaking in a calendar year which is particularly –
TALKING POINTS WE ASK YOU TO SUPPORT H.R. 644, THE AMERICA GIVES MORE ACT OF 2015 This bill, which was passed by the House on February 12th, would simplify the excise tax to a flat rate of 1%. PRIVATE FOUNDATION EXCISE TAX For more than a decade, we’ve been asking Congress to simplify the private foundation excise tax to a single rate. The current excise tax is extremely complicated and requires extensive time and resources to calculate. It has become a real management challenge because its complex, two-tier structure and the inherent uncertainties in precisely calculating net investment income by year’s end. Consequently, the rate structure actually serves as a disincentive for increasing grantmaking in a calendar year – which is particularly devastating when late-year emergencies or disasters occur. A higher grant payout this year to assist farmers impacted by drought in California, for example, will make it much more challenging for the foundation to qualify for the lower tax rate during the next 5 years. A single rate for all private foundations would greatly simplify compliance, improve efficiencies, and remove disincentives. A flat rate of 1% would certainly be simple to administer. We are open to considering alternative rates, but would find it difficult to support a rate that is used primarily as a revenue- raising mechanism. The President has included a single-rate simplification of 1.35% in past Budgets, including the recently-released Fiscal Year 2016 Budget.
Talking_Points_2015_0.docx