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New House Tax Giveaway Scheme Would Effectively Repeal Johnson Amendment

Nov. 9, 2017

New House Tax Giveaway Scheme Would Effectively Repeal Johnson Amendment

Statement of Public Citizen Experts

Note: Changes to the Republican tax giveaway legislation unveiled today in the U.S. House of Representatives by Ways and Means Committee Chair Kevin Brady make a bill that was bad for nonprofits even worse. The new version would allow all 501(c)(3)s, including churches, charities, universities, hospitals and many other groups, to engage in partisan politics. This change would divide congregations, undermine the charitable sector and drive much more dark money into our elections at all levels.

“Congressional Republicans are maneuvering to usher in Citizens United 2.0, scheming to manipulate the tax code to convert educational charities and religious organizations into tax-deductible dark money organizations. When it comes to big money dominance of our elections, this is the worst and most dangerous development since the disastrous Citizens United ruling.

“The original version of the tax plan applied the change only to churches in the course of their regular meetings, which would have exposed churches to unprecedented partisan manipulation. The new version expands the loophole and extends the threat to the entire nonprofit sector.”

–Robert Weissman, president of Public Citizen

“The chairman’s amendment made a bad provision worse. It deepens a secret money conduit and would lead to a flood of taxpayer subsidized secret political spending. The provision now allows both charities and churches to directly endorse candidates, which is the wrong thing for their missions and for our democracy. The one thing our system does not need is more dark money.”

–Lisa Gilbert, vice president of legislative affairs for Public Citizen

“This change will open the books of churches and charities to the IRS in an unprecedented way. This puts determinations of what a church’s ordinary course of business is or how much a de minimis cost is squarely in the hands of the IRS. The only way to know if a cost is de minimis is to look at all the activities a (c)(3) undertakes, which is spectacularly invasive.”

–Emily Peterson-Cassin, Bright Lines project coordinator at Public Citizen

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