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Camp Opening Statement: Hearing on the Charitable Deduction

February 14, 2013

Good morning and thank you for joining us today.   

As part of the Committee’s ongoing commitment to pursue comprehensive tax  reform in an open and transparent manner, the Committee is holding today’s hearing to allow stakeholders and members of the public the opportunity to share their perspectives on the deduction for charitable contributions.

For today’s hearing we granted all timely requests to testify in person, so that national and local leaders in the charitable community could educate us about the work they do each day and what Congress should consider as we explore comprehensive tax reform.

I realize that this open-door approach is a bit different than the way we typically structure hearings, but looking back to the 1986 Tax Reform Act, the last comprehensive tax reform endeavor, it turns out this is a Ways and Means tradition.  Then-Chairman Dan Rostenkowski, a Democrat from Illinois, employed the same method for gathering stakeholder input.   

Much like he did, I believe that including the voices of the stakeholders who are working every day in our communities is critical to understanding how the policy decisions we make in Washington will affect people back home.  

We want to ensure that whichever policies we ultimately decide to pursue are crafted in a way that makes the tax code simpler, fairer and easier to comply with.  In the case of the charitable community, we also want to make sure tax reform allows you to continue to meet and fulfill the mission of each of your organizations.

Our nation’s public charities and private foundations perform invaluable services for our society – at home, nationally and, in some cases, across the globe.  This is especially true during times of economic slowdown and high unemployment – challenges we have struggled with mightily over the past years.  These are also the same organizations that step up and respond to individual moments of crisis  – hurricanes, floods, earthquakes, fires, acts of terrorism and community-specific tragedies, too.  

It is in those moments that these organizations come face-to-face with humanity and the generosity of men and women who answer the call for help.  Oftentimes, that means lending a hand to their own families, friends and fellow churchgoers.  These organizations depend upon the goodwill of the American people – the most giving and charitable people in the world, and our response, along with their service, underscores the truth that “charity begins at home.”

Over the last several months we’ve heard a lot about the different ways that the tax code might be changed that could affect the charitable community and the valuable services it provides.    

Examples of some of these changes include:

  • Limiting the tax rate against which contributions may be deducted, as the President has repeatedly proposed;
  • A dollar cap on total itemized deductions:
  • A floor below which contributions may not be deducted; and
  • The replacement of the deduction with a tax credit available regardless of whether the taxpayer itemizes.

Different types of limitations could have varying effects on giving.

Because of the critical role that charities play, the Committee needs to hear directly from the charitable community before considering any proposals as part of comprehensive tax reform.  

Let me be clear on this point – we want to hear from this community before considering proposals.  This hearing is not about you responding to what we have already done.  Instead, it is about gathering your input so that any policies that might be considered will be crafted with you and the communities you serve in mind.

So, I’d like to thank all of you for being here today.  We have assembled six panels of witnesses who have indicated a strong desire to share their perspectives.  All of you have a unique story to tell, and we look forward to your testimony.  Thank you again for being here today and thank you in advance for your patience – I know it will be a long day.