[Congressional Record Volume 144, Number 145 (Tuesday, October 13, 1998)]
[Extensions of Remarks]
[Pages E2106-E2107]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                CHARITABLE GIVING INCENTIVE ACT, HR 3029

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                           HON. JENNIFER DUNN

                             of washington

                    in the house of representatives

                       Tuesday, October 13, 1998

  Ms. DUNN. Mr. Speaker, among the provisions included in the tax 
package we passed yesterday is a provision of great importance to the 
charitable giving community: an extension of the enhanced deduction for 
contributions of publicly-traded stock to private foundations. Although 
extending this deduction benefits many is a useful tool for providing 
funds for charitable purposes, this deduction alone is not enough.
  In this era of ever-tightening fiscal constraints, we have asked our 
communities to do more and more for those less fortunate. Charitable 
organizations in our communities have become an integral part of the 
safety net for the poor and homeless and significant sources of 
assistance for education, health care, child development and the arts 
in every community.
  To meet the increasing deficit in unmet social needs, the government 
cannot merely expect the private sector to fill the gap, but must 
provide the leadership for the use of private sector resources through 
changes in the tax code. One source of untapped resources for 
charitable purposes is the contribution of closely-held corporate 
stock. Under current law, the tax cost of contributing closely-held 
stock to a charity or foundation is prohibitive, and it discourages 
families and owners from disposing of their businesses in this manner.
  Earlier this year, I was joined by Representatives Furse, Nethercutt, 
Hooley, Paul and Smith of Oregon in introducing legislation that would 
also provide an incentive to business owners to use their corporate 
wealth for charitable causes. H.R. 3029, the Charitable Giving 
Incentive Act of 1998, would permit a closely-held business to transfer 
its assets into a 501(c)(3) charitable organization without paying the 
35 percent corporate level tax. Thus, the recipient charity would 
receive the full benefit of the gift. Identical legislation has also 
been introduced in the Senate by Senators Smith of Oregon, Feinstein, 
Wyden, Baucus and Gorton.
  In addition to this bipartisan Congressional support, we have 
garnered support from the charitable community. Below is a letter 
signed by several organizations that represent thousands of charitable 
institutions across the country, calling for enactment of this 
legislation. It is my intention to reintroduce this legislation in the 
106th Congress and I look forward to working with the Ways and Means 
Committee Chairman Archer, Ranking Member Rangel and my House 
colleagues to legislate changes that will make it easier for the 
citizens of this country to give to charitable causes.

                                                   October 9, 1998
     Representative Bill Archer,
     Chairman, House Committee on Ways and Means, House of 
         Representatives, Washington, DC.
       The undersigned organizations are all tax exempt 501(c)(3) 
     charitable entities, or representatives thereof, whose 
     efforts are dependent upon the charitable giving of concerned 
     individuals. With the needs of our communities growing, and 
     in some cases the financial support from government agencies 
     diminishing, many endeavors are increasingly reliant upon a 
     core group of concerned, consistent, and active givers. It is 
     important to encourage and reward the selfless sharing by 
     this group and to expand its membership.
       Accordingly, we support legislation that has been 
     introduced in this Congress to provide tax incentives for the 
     donation of significant amounts of closely-held stock. H.R. 
     3029 and S. 1412, the Charitable Giving Incentive Act, would 
     permit the tax-free liquidation of a closely-held corporation 
     into a charity if at least 80 percent of the stock of the 
     corporation were donated to a 501(c)(3) organization upon the 
     death of a donor. Thus, the 35 percent corporate tax that 
     would otherwise be paid is not imposed: all of the value of 
     the contribution would go to charitable purposes. This is the 
     same tax result as would occur if the business had been held 
     in non-corporate form.
       The current disincentive for substantial contributions of 
     closely-held stock should be corrected at the earliest 
     opportunity. We believe such a change would encourage 
     additional transfers to charity because the donors will see 
     more of the benefit going to the charity and not to taxes. We 
     hope that appropriate tax incentives will encourage more 
     families to devote significant portions of their businesses, 
     and their wealth, to charitable purposes.
       As a key member of Congress, we urge your active support 
     for this effort to expand

[[Page E2107]]

     charitable giving by individuals and businesses. The needs 
     are great. While government cannot do it all, it can provide 
     leadership for others to do more by removing current 
     impediments. Your support and assistance are needed. Thank 
     you for you favorable consideration of this request.
           Sincerely,
         Council on Foundations, The Children's Foundation, 
           Council of Jewish Federations, The National Federation 
           of Nonprofits, The National Community Action 
           Foundation.

           

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