Editor’s note: This post was originally published on HuffPost.
I have some important questions for United States Senators who, along with President Donald Trump, are intent on repealing the estate tax.
Let me be clear: Repeal will hurt millions of people across the country in significant ways, while helping only a few wealthy families. It will create far more losers than winners. One of the biggest casualties will be charitable giving that benefits communities all across the nation.
The vast majority of Americans will never pay the estate tax. Only estates over $5.5 million per individual and $11 million per couple are subject to the tax. As a result, only about one in 500 estates is now taxed.
That said, the estate tax remains a critical incentive for charitable gifts that benefit tens of millions of Americans. Those wealthy enough to pay estate taxes are responsible for a significant percentage of total charitable giving. Their gifts support hospitals, universities, and other nonprofits that improve the quality of life in every state.
People make large charitable contributions for a variety of reasons, and Americans are certainly generous. The estate tax, however, is a compelling motivation for the wealthy to give to charity rather than pay the tax. Without it, there will be a substantial decline in very large gifts: the kind that can be truly transformational.
We saw this happen in 2010 when the estate tax was not in force. During that time, charitable bequests dropped by 37 percent from the previous year (2009), and then rose by 92 percent in the following year (2011) when Congress restored the estate tax.
What kinds of gifts are we talking about? The Chronicle of Philanthropy has been tracking the kinds of major gifts and bequests the estate tax helps incentivize. The National Committee for Responsive Philanthropy, the organization I lead, has analyzed the data, and what we found is striking.
More than $166 billion in publicly reported gifts and bequests of $1 million or more were made from 2005 through July 2017. These gifts are spread all across the country, going to hospitals, colleges, community foundations and arts institutions that benefit countless Americans. The gifts provide financial aid to needy students, advance cutting edge medical research, build new cancer care centers, and provide recreational and cultural opportunities to youth and adults nationwide. Here are a few examples:
Transformative charitable gifts that make Americans’ lives better will be endangered if Congress repeals the federal estate tax. Every community across the nation has benefitted from these kinds of gifts.
The U.S. House of Representatives seems highly likely to include full repeal of the estate tax in their tax reform proposal. It falls on our senators, therefore, to reject this misguided idea.
Aaron Dorfman is president and CEO of the National Committee for Responsive Philanthropy. Follow @NCRP on Twitter.