About CASE

Brian Flahaven
Director of Government Relations


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 Without congressional action, the estate tax will be fully repealed in 2010 and will reappear at pre-2001 levels in 2011.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

CASE believes in advancing education to transform lives and society. As a global nonprofit membership association of educational institutions, CASE helps develop the communities of professional practice that build institutional resilience and success in challenging times. The communities include staff engaged in alumni relations, fundraising, marketing, student recruitment, stakeholder engagement, crisis communications and government relations. CASE is volunteer-led and uses the intellectual capital of senior practitioners to build capacity and capability across the world.

CASE has offices in Washington, D.C., London, Singapore and Mexico City. Member institutions include more than 3,700 colleges and universities, primary and secondary independent and international schools, and nonprofit organizations in 82 countries. CASE serves nearly 88,000 practitioners. For more information about CASE, please visit www.case.org.