It is well known that the tax bill passed last Congress with only Republican votes gave trillions of dollars in tax cuts to corporations and the wealthy on the backs of America's working families. What is not as well known is that to pay for that massive tax cut, which is still projected to raise the national debt by about $2 trillion over the next 10 years, Republicans placed a new tax on places of worship and charitable organizations.
Congress must repeal this new tax, and we should do so without adding another dime to the debt or an additional burden on America's working families. My bill, the Stop the Tax Hike on Charities and Places of Worship Act, would accomplish this goal.
Just as our country's history is steeped in volunteerism and philanthropy to aid the less fortunate, so too is our tax code, giving tax-exempt status to organizations working to improve our communities. In enacting their tax bill, Republicans turned their backs on this important principle.
The new tax forces nonprofit organizations to pay 21 percent of the value of so-called fringe benefits provided to employees. In the case of the affected nonprofit organizations, this generally means parking, other transportation and perhaps an occasional meal.
The tax threatens to cost charities and places of worship tens of thousands of dollars.
Many nonprofits rely exclusively on charitable donations; any available dollar should be spent in service of their missions, not taken by the Internal Revenue Service because of Congress' shortsightedness.
The cost of this new tax will extend beyond its sticker price. Due to their charitable status, most of these organizations have little experience dealing with the IRS, let alone a clear understanding of what is covered by the new tax and how to calculate its value.
Proverbs 31:9 calls upon us to "Speak up and judge fairly; defend the rights of the poor and needy." In Matthew 25:45 we are advised, "Whatever you did not do for one of the least of these, you did not do for me."
In introducing this legislation, my colleagues and I are making a fair judgment regarding who in our country should shoulder the burden of taxation and who should not. We are defending the rights of the poor and needy who are served by these nonprofits. This bill is a small step in reorienting our priorities back in favor of the least of these.
As we seek to remove the burden from those without the resources to shoulder it, we must be careful not to shift this burden to those we should also be protecting. We must not allow the revenue lost by the repeal of this tax to be added to the trillions of dollars of debt with which the Republican tax bill has already saddled our children and grandchildren.
Because much of the revenue given away by the Republican tax bill was lost through the drastic cut in the tax rate paid by corporations, the most sensible way to offset the cost of repealing the nonprofits tax is to very slightly pare back the corporate rate cut. Instead of maintaining the Republican tax bill's reduction in the corporate tax rate from 35 percent to 21 percent, the Stop the Tax Hike on Charities and Places of Worship Act will be fully paid for by increasing the rate by just a fraction of 1 percent. This would leave the corporate tax rate far below the 25 percent that Mitt Romney proposed as a presidential candidate in 2012 and for which my Republican colleagues campaigned, so they should have no objections.
Governing often requires difficult trade-offs. The trade-off in this legislation is not one of them. While Democrats and Republicans will continue to disagree on the merits of the tax bill, I hope we can agree to responsibly fix this particularly damaging provision by passing the Stop the Tax Hike on Charities and Places of Worship Act.
U.S. Rep. James E. Clyburn, D-S.C., is the House majority whip.
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