Complete Story
01/23/2025
House Budget Floats Menu of Reconciliation Options
The menu contains numerous proposals aimed at the tax-exempt sector
Last Friday, House Budget Committee Republicans floated a menu of policy options and cost estimates for the GOP’s reconciliation package that spans 11 committees. The 51-page menu reflects Republicans’ search for revenue to offset major tax legislation, among other priorities.
House Republicans' preferred strategy on budget reconciliation is to craft one massive bill covering tax cuts, spending cuts, immigration, energy policy and more. According to the nonpartisan Congressional Budget Office (CBO), extending the 2017 Trump tax cuts for the next 10 years would add $4.6 trillion to the deficit, which helps explain the wide-ranging menu of policy options proposed to offset the cost of this enormous package.
While the menu should not be considered formal policy prescriptions at this time, it contains numerous proposals aimed at the tax-exempt sector, including eliminating nonprofit status for hospitals; eliminating the deduction for charitable contributions to health organizations; eliminating the tax exemption for credit union income and hiking taxes on university endowments.
Since last summer, the American Society of Association Executives (ASAE) has been on high alert that associations and other tax-exempt organizations could be targeted as Congress drafts major tax legislation in 2025.
Since last year, influential policy think tanks, including the Tax Foundation and Cato Institute, have called for taxing all tax-exempt organizations across the board, applying the 21 percent corporate tax rate to all non-donation net revenue.
Membership dues, sponsorships, investment income and educational program revenue are only a few examples of what is potentially at risk.
ASAE has formed the Community Impact Coalition, of which OSAP is engaged, to educate the 119th Congress about the social and economic benefits of associations, charities, and other tax-exempt organizations. The coalition is supported by a wide range of trade associations, charities, and professional societies.
This article was provided to OSAP by ASAE's Power of Associations and Inroads.
