Brian Flahaven
Director of Government Relations
CASE
+1-202-478-5617
flahaven@case.org

May 5, 2009

CASE Takes Position on Itemized Deduction Cap, Estate Tax

WASHINGTON, D.C.-Today, the Council for Advancement and Support of Education announced that it is taking positions on two proposals in President Barack Obama's FY10 budget plan that could influence giving to colleges, universities and independent schools.

CASE supports the president's proposal to continue the estate tax at its current 2009 levels. This year, the first $3.5 million of an individual's estate is exempt while the remainder is taxed at a 45 percent rate. Without congressional action, the estate tax will be fully repealed in 2010 and will reappear at pre-2001 levels in 2011.

CASE opposes the president's proposal to cap the itemized deduction rate at 28 percent for high-income taxpayers (individuals earning more than $200,000 annually and married couples earning more than $250,000 annually). Currently, these taxpayers can take itemized deductions at the 33 or 35 percent rate, depending on their tax brackets.

CASE President John Lippincott issued the following statement:

"CASE applauds President Obama for including a number of provisions in his FY10 budget plan that benefit students and educational institutions, particularly his proposal to continue the estate tax at 2009 levels. A 2004 Congressional Budget Office study found that full repeal of the estate tax would lead to a 6 to 12 percent drop in charitable giving per year and reduce bequests by 16 to 28 percent.

"Allowing the estate tax to be fully eliminated could have a particularly negative impact on giving to colleges, universities and independent schools, which receive a large number of gifts through bequests. In 2008, educational institutions participating in the Council for Aid to Education's Voluntary Support of Education survey reported receiving $2.65 billion in bequests and $740 million in deferred gifts (at present value). Freezing the estate tax at the 2009 levels both preserves the tax incentive for charitable gifts and addresses legislators' concerns about the tax's impact on small businesses and family farms.

"While the president's budget proposal on the estate tax encourages charitable giving, his proposal to limit the value of itemized deductions for high-income taxpayers does the opposite. If enacted, the proposal would effectively increase the cost of giving for the segment of the population that gives -- and can afford to give -- the most to charities. Both anecdotal reports and studies suggest that some donors will reconsider making and pledging gifts to their institutions if the proposal is enacted. Given the significant financial challenges facing colleges, universities and independent schools, we need to ensure that public policy fully supports and encourages those who can give to do so.

"Charitable donations help educational institutions achieve their teaching, research and public service missions. We look forward to working with President Obama and Congress on identifying additional ways to encourage increased charitable giving among all individuals."

Learn more about both proposals at www.case.org/Public Policy.

About CASE

Headquartered in Washington, D.C., with offices in London, Singapore and Mexico City, the Council for Advancement and Support of Education is the professional organization for advancement professionals who work in alumni relations, communications, fundraising, marketing and other areas.

CASE is one of the largest nonprofit education associations in terms of institutional membership. Its membership includes more than 3,400 colleges, universities, independent elementary and secondary schools, and educational associates in 74 countries around the world. It serves nearly 65,000 advancement professionals on the staffs of its member institutions.

CASE helps its members build stronger relationships with their alumni and donors, raise funds for campus projects, produce recruitment materials, market their institutions to prospective students, diversify the profession and foster public support of education. CASE also offers a variety of advancement products and services, provides standards and an ethical framework for the profession, and works with other organizations to respond to public issues of concern while promoting the importance of education worldwide.

###