Please take action to ensure members of Congress protect the charitable deduction and do not weaken nonprofits’ ability to serve and strengthen communities. As part of efforts to reduce the federal deficit, proposals to change the charitable deduction to retain more federal revenue have been discussed. While deficit reduction is an important priority for our nation, weakening the charitable deduction would encourage less giving and reduce resources to nonprofits at a time when demands for nonprofits’ services are high and could be increased by cuts and reforms to federal programs.
The Budget Control Act of 2011 created the Joint Select Committee on Deficit Reduction (Supercommittee) to reduce the federal deficit by at least $1.2 trillion. Although the Supercommittee was expected to produce a plan consisting of revenue increases, entitlement reforms, and spending cuts, it ultimately failed to agree on a plan by the Nov. 23, 2011 deadline. As required by the Budget Control Act, failure to implement a plan triggers $1.2 trillion in automatic spending reductions over ten years starting in January 2013. About $600 billion in cuts would come from defense and another $600 billion from non-defense discretionary spending.
Congress has until the end of 2012 to determine how to implement these reductions. As an alternative, Congress could try to amend or repeal the automatic reductions though the President has said he will veto bills that change the total amount of the reductions.
While changes to the charitable deduction are not expected this year due to the failure of the Supercommittee, changes to the deduction still could be proposed over the next year as Congress continues its efforts to reduce the deficit.
Your continued help is needed to ensure our members of Congress know how changing the charitable deduction would impact Colorado’s nonprofits: