The Honorable John Cornyn The Honorable Ted Cruz United States Senate Washington, D.C. 20510 Dear Senator Cornyn and Senator Cruz, We write to you today, representing communities from across the state of Texas, to ask you to support amendments to the Senate tax reform bill that will preserve private charitable giving and support workers throughout our state. As you know, the Senate Finance Committee is currently considering comprehensive tax reform legislation, and the full Senate will consider the bill in the coming weeks. Like the version voted on in the House of Representatives, this Senate bill will cause significant reductions in charitable giving and is a missed opportunity to support our Texas workers. Given the speed with which this legislation is progressing, we hope you will intervene quickly on behalf of charities in our state. While technically preserving the “charitable deduction”, according to the Joint Committee on Taxation, under the proposed House Bill, an estimated 31 million taxpayers who currently claim the deduction will lose it. According to Indiana University’s School on Philanthropy, fundamental changes to the standard deduction would cause $13 billion in lost private donations to charities. That is a 5% decrease in overall giving, and that loss of revenue will impact faith-based, basic needs, and disaster relief charities the most as they rely on gifts from middle class donors. In Texas, 2,240,530 donors claimed the charitable deduction, accounting for over $17 billion dollars. A loss of 5% through tax reform would result in over $850 million less from Texas donors to food banks, homeless or domestic violence shelters, job training programs targeting veterans, or early childhood programs. Lost contributions to nonprofits translates directly to reduced services for our communities. The charitable deduction has existed for 100 years and has been studied by economists and tax experts for decades. While individuals give to charitable causes for their own reasons – most often because of the strong philanthropy tradition and spirit of our country – there exists empirical and anecdotal consensus that aggregate tax incentives significantly increase giving from people at all income levels. Arguments that tax reform will result in increased giving, absent a charitable deduction, are not supported by any economic data or studies or our experience in the charitable sector. If tax reform in its current form is enacted, 95% of donors to charity will be taxed on their donations. Only the most wealthy donors – important donors to be sure – will be able to 1910 E. Martin Luther King Jr. Blvd. Austin, Texas 78702 512.651.1149 uwtexas.org Making Texas a better place to live and do business make tax-exempt donations. But that result is inconsistent with our nation’s principles and deeply unfair to the 95% whose gifts should be valued just as much. Fortunately, legislation has been introduced in the House (Congressman Mark Walker (R-NC)) and an amendment has been introduced in the Senate (Senators Stabenow (D- MI) and Wyden (D-OR)) that would mitigate the damage done to charities by relieving almost all taxpayers from paying taxes on money they donate to charity. Additionally, tax reform that does not expand the Earned Income Tax Credit (EITC), and only expands the Child Tax Credit (CTC) for higher earners is a missed opportunity to support struggling workers in Texas. Previous bipartisan proposals to expand the EITC for workers not raising children at home by increasing the maximum credit for this group and lowering the age of eligibility to 21, would help 1 million Texans to climb out of poverty, including: 45,000 Texas veteran and military service members, over 100,000 Texas rural workers, and around 300,000 Texas young workers. The House’s current tax reform plan to include an expansion for the CTC would exclude 10 million low-income children. An expansion of the CTC that increases refundability by lowering the earnings threshold and increasing the phase-in rate, as advocated for by Senators on both sides of the aisle, would equip low-income families with poverty fighting tools needed to stabilize and move up the ladder of economic mobility. We urge you to cosponsor Senator Stabenow’s amendment, or support similar legislative language in any tax reform legislation to be voted on by the Senate that would allow anyone to claim the charitable deduction, and that would support hard working Texans. Sincerely, Adrianna Cuellar-Rojas Glenn Cochran President & CEO President & CEO United Ways of Texas Lubbock Area United Way Gary Ashcraft Matt Yell Executive Director President & CEO Nacogdoches Area United Way North Texas United Way Peggy Vernon Dolly Stokes Executive Secretary Executive Director Scurry County United Way Victoria County United Way Katie Noffsker Jenna Masters Executive Director Executive Director United Way of Amarillo & Canyon United Way of Brazoria County 1910 E. Martin Luther King Jr. Blvd. Austin, Texas 78702 512.651.1149 uwtexas.org Making Texas a better place to live and do business Karyn Husbands Alison Prince President & CEO President & CEO United Way of Beaumont & North United Way of the Brazos Valley Jefferson County Stephanie O’Banion Catrina Wilson President & CEO President & CEO United Way of Central Texas United Way of the Coastal Bend Gary Henderson Lindsey White President & CEO Executive Director United Way of Denton County United Way of Galveston Chris G. Delesandri David Smith Executive Director Chief Executive Officer United Way of Galveston County Mainland United Way for Greater Austin Melissa Reabold Anna M. Babin CEO President & CEO United Way of Greater Baytown Area & United Way of Greater Houston Chambers County Michelle Harper Frank Condron President & CEO President United Way of Hays & Caldwell County United Way of Jackson County Jennifer Sampson Mark Alexander President & CEO Executive Director United Way of Metropolitan Dallas United Way of Midland Janie Johnson Roxann Allen CEO Executive Director United Way of Mid & South Jefferson United Way of Moore County County Cara Wilson Jessica Belschner Executive Director Executive Director United Way of Navarro County United Way of Northern Cameron County Hank Herrick Lyndon R. Herridge Executive Director President & CEO United Way of Odessa United Way of San Antonio and Bexar County 1910 E. Martin Luther King Jr. Blvd. Austin, Texas 78702 512.651.1149 uwtexas.org Making Texas a better place to live and do business Nan Moore Thelma M. Garza President President United Way of Smith County United Way of South Texas Traci Wickett Barbara Moscaccio President & CEO Executive Director & CEO United Way of Southern Cameron County United Way of Waco-McLennan County LeAnn Powers Frances Dalbey CEO Executive Director United Way of Williamson County United Way of Hunt County 1910 E. Martin Luther King Jr. Blvd. Austin, Texas 78702 512.651.1149 uwtexas.org Making Texas a better place to live and do business .