Doing good things makes you feel good. Doing good things and receiving good things in return makes you feel really good. The America Gives More Act (H.R. 644/S. 330) will make it possible for farmers, food-service companies and regular ol’ folks to do just that.
If signed into law, the America Gives More Act will amend the Internal Revenue Service tax code to:
- Reinstate and permanently allow a tax deduction for charitable contributions of wholesome food, as defined by the Bill Emerson Good Samaritan Food Donation Act—up to 15 percent of a taxpayer’s net income (increased from 10 percent) with a five-year carryover period for contributions above that amount. The permanent law currently only offers this tax credit to C corporations, which small businesses, restaurants and farmers usually aren’t.
- Raise the deduction a landowner can take for donating a conservation easement to 50 percent of his annual income. Qualifying farmers and ranchers can deduct up to their entire income. The carry-forward period for these tax deductions is increased to 15 years.
- Reinstate and permanently give people 70½ years old and older no penalties when they withdraw up to $100,000 to make donations to nonprofits.
- Uncomplicate the excise tax levied upon nonprofits with a single excise tax rate of 1 percent on net investment income for private foundations.
The Good and Bad
The potential impact of a tax-code change like this is far-reaching for farmers, for people working in and benefiting from food-access programs, and for individuals who have the financial means to support good work being done in all sectors. In a letter to the Senate Committee on Finance, the leaders of eight prominent organizations in the Council of Nonprofits wrote:
“The [currently expired] enhanced deduction for land conservation increased conservation totals by 30 percent, up to 1 million acres per year. The incentive for donating food has translated to a 137-percent increase in the amount of food donated by restaurants to food banks. And, simplifying the excise tax will encourage a higher grant payout this year to assist farmers impacted by the drought in California.”
The arguments against the America Gives More Act are also compelling. The National Council of Nonprofits points out the two main statements in opposition are:
- These tax credits should be offset with other spending cuts or tax hikes.
- Smaller tax provisions should not be passed in piecemeal fashion while comprehensive tax reform is being negotiated.
Yet tax incentives along these lines have been enacted and expired in the past—Jan. 1, 2015, most recently. At this moment, these tax incentives do not exist. To have these pass as permanent tax-code changes would relieve a lot of confusion surrounding food and nonprofit donations and potentially boost these donations.
Government-transparency website GovTrack thinks the America Gives More Act only has a 15-percent chance of getting enacted, so if you’d like to see it happen, you should get on it.
This is a great time to call your senators! Find his or her telephone number, and call to voice your position on the America Gives More Act. Read my previous blog entry and watch a quick video about how easy and not time-consuming making a call really is, and then—whether you think this change in tax code is the best idea you’ve heard all year or you believe it to be the downfall of America—pick up your phone.