×
×
homepage logo
SUBSCRIBE

Guest opinion: Keep the private foundation tax hike out of the ‘Big, Beautiful Bill’

By Elizabeth McGuigan - | Jul 2, 2025

J. Scott Applewhite, Associated Press

The Capitol is seen in Washington on Friday, Sept. 6, 2024, as Congress plans to return to work following a lengthy break.

While members of Congress are in Washington grappling with tax reform, the people of Utah are looking at a mixed bag.

On the one hand, extending President Trump’s 2017 tax cuts is a worthy effort that will put more money in Americans’ pockets and drive the economy forward. It fuels economic prosperity, nurtures the uniquely American spirit of generosity and plays a critical role in supporting local programs and services in our communities. This generosity empowers the work of thousands of private charitable foundations across the country, including several in Utah, that have been putting Americans first for generations.

But it’s not all good news. Congress’s “One Big Beautiful Bill” initially included a punishing tax hike on private charitable foundations. Currently, the excise tax on all charitable foundations is 1.39%, but the House version of the bill proposed taxing foundations up to 10%, depending on the size of the foundation. Some foundations, including those in Utah, could see their tax bill increase over fivefold.

Senate Republicans removed this tax hike from their version of the bill. But, there is a chance that it could be added back in by those who don’t understand the harm this steep tax increase would do to private charity.

This would be a grave mistake. For decades, American citizens have come together and formed nonprofit organizations to champion private solutions to our nation’s greatest challenges, with philanthropy as a key partner. A tax hike on foundations would drastically reduce the resources available for effective charitable groups that advance liberty, opportunity and personal responsibility — harming Americans in every single state. This means fewer dollars for a wide range of worthy causes: Disaster relief, educational opportunities for low-income students, groups focused on preventing veteran suicide, foster care organizations that keep families together, food banks, homeless shelters, faith-based charities and many other examples that help communities big and small.

This is especially harmful to Utah’s nonprofit sector and the people who rely on charity. In Utah alone, there are nearly 12,000 nonprofit organizations that strengthen local communities and improve lives. From supporting access to quality education and health care facilities to other critical services, the contributions of private foundations are key pillars of our society. They are adept at filling the gaps where government is less effective.

If the proposed tax hike goes into effect, the federal government would take nearly $16 billion over 10 years that would otherwise go to U.S. charities. This massive transfer of private resources to the U.S. Treasury is at odds with conservative values like limited government and individual freedom. Under no circumstance should charitable dollars be used to pay for Uncle Sam’s out-of-control spending habit.

If the private foundation tax increase makes its way into the final version of the “One Big Beautiful Bill” charities could lose much-needed funding that supports everything from educational opportunities to care for our nation’s veterans and their families. Rep. Blake Moore is uniquely positioned to protect charitable giving by ensuring that doesn’t happen.

Let’s be clear: The government simply does not know how to invest charitable dollars better than the hardworking, generous Americans who earned them. This is especially true of the federal government in Washington, D.C., which operates far from the people of Utah and the challenges they face.

In contrast with a government that cannot and should not attempt to meet all the needs of America’s communities, private foundations have stepped up — time and again — especially during tough times. As foundation assets have grown, so has their grant-making to the causes and communities they support — creating stability and protecting Americans from the negative effects of economic turmoil and uncertainty. In recent years, U.S. foundations have invested well over $100 billion annually in charitable efforts, and the beneficiaries are countless.

The people of Utah need to be able to keep more of their hard-earned dollars. We must extend the 2017 tax cuts, but without this tax increase. A tax hike on foundations undermines the goal of true “tax relief” by devastating charitable giving and the millions of Americans who rely on it. They are the ones who will be hit the hardest — from Utah to the rest of America.

Elizabeth McGuigan serves as chief operating officer at Philanthropy Roundtable, a community of hundreds of charitable donors across the country committed to advancing liberty, opportunity and personal responsibility.