While the war in Iraq rages on, everything is driven out of the news besides the images sent from the embedded press. This time becomes opportune to drive legislation through the House and Senate into law without public comment or even much public knowledge. Some of this legislation has a direct effect on nonprofits.

Here are some examples:

THE PROBLEM: Estate Tax Repeal

The estate tax is tax imposed on wealth transfers made at the holder's death. The basic features of the current estate tax were adopted by the Tax Reform Act of 1976. This law established a unified system to tax all types of wealth transfers. The current estate tax thus consists of the traditional estate tax, plus two additional components designed to close "loopholes": a gift tax and a generation-skipping transfer (GST) tax. The value of all three types of wealth transfers are aggregated and taxed together at rates effectively ranging from 37 to 60 percent on net taxable estates worth $1 million or more.

Although the movement to repeal the estate tax seems to be losing ground, its supporters will use every trick they can to get their way. Sen. Jon Kyl, in a move both audacious and tasteless, introduced legislation the day the war started (March 19) to move up the permanent repeal of the tax by one year to 2009. His amendment attached to the Senate Budget Committee’s budget resolution passed 51-48. However, as OMB Watch points out, this is actually a sign of the weakening of estate tax repeal forces. Ironically, estate tax, which is our nation’s oldest tax, was originally used in the early founding of the country (before its present form enacted in 1916) to raise fund necessary in a time of war. Estate tax is being phased out and will be repealed by 2009. Then in 2011, the law will return, unless the repeal is made permanent. We must insure this does not happen.

WHY YOUR NONPROFIT SHOULD CARE:

1. Estate tax is a truly redistributive tax and it separates democracies from aristocracies. Only a tiny handful of people pay estate tax now–out of 180 million Americans who file income taxes every year, only 6,000 pay estate tax. In the state of New York, which has the most people paying estate tax, only 422 estates paid tax in 1999. If you believe in closing the rising gap between rich and poor, you must favor estate tax.
2. Estate tax revenues will account for about $30 billion each year, and with a larger aging population, the income from estate tax will be higher and higher. We cannot afford more tax cuts, which only result in cuts to nonprofits.
3. Finally, the tax incentives for giving away money left in an estate will be destroyed if estate tax is repealed. While evidence is unclear as to how much tax incentives mean to charitable people, there is no point in discouraging charitable giving.

THE PROBLEM: Cutbacks in Americorps funding

AmeriCorps is a network of national service programs that engage more than 50,000 Americans each year in intensive service to meet critical needs in education, public safety, health, and the environment. AmeriCorps members serve through more than 2,100 nonprofits, public agencies, and faith-based organizations. Congressional Republicans and the Office of Management and Budget have recommended funding that will halve the number of Americorps volunteers. After 9/11, President Bush had called for an increase from 50,000 volunteers to 75,000, but the funding recommended would only allow hiring 26,000.

WHY YOUR NONPROFIT SHOULD CARE

1. Many nonprofits have been able to expand their staffing with Americorps volunteers and thousands of people have been able to learn valuable skills while working in a nonprofit. Many people currently working in nonprofits started out as VISTA or AMERICORPS volunteers.
2. With funding cuts and increased need, this program is an economical and effective way to continue to provide service, and cutting it is a foolish way to save money.

THE PROBLEM: Military Seeks More Exemptions From Environmental Laws

Permission to be exempt from the Marine Mammal Act, the Endangered Species Act, and other environmental laws is once again being vigorously pursued by the military. Paul Wolfowitz, Deputy Secretary’y of Defense, has called for an all out assault on these laws insofar as they affect the military’s ability to conduct training exercises. He claims the laws are limiting the military’s ability to fight terrorism, despite the fact that Christine Whitman, Secretary of the Environment, has said she does not know any exercises that have had to be changed or curtailed because of these laws. A request for exemption from environmental laws was defeated last year and it can be defeated again.

WHY YOUR NONPROFIT SHOULD CARE

If I have to tell you, I despair.