NPR - Wealthy Americans may get a new conduit for political money in the tax overhaul bill now being reconciled on Capitol Hill.
A small provision in the House version of the bill would let big donors secretly give unlimited amounts to independent political groups — and write off the contributions as charitable gifts.
"You not only get to help that candidate with a big contribution, it's not going to be publicized and you're going to be able to take a tax deduction on top of it," said Michael Franz, a political scientist, who analyzes political advertising with the Wesleyan Media Project.
The change would echo — or possibly dwarf — the influx of unregulated, undisclosed campaign money brought about by two Supreme Court decisions over the past decade. Those rulings permitted unlimited contributions to tax-exempt "social welfare" groups engaging in politics. The groups operate under Section 501(c)(4) of the tax code and don't disclose their donors.
The tax overhaul bill offers a potentially much bigger loophole — one that political operatives will try to drive right through. It would politicize a different set of tax-exempt groups: 501(c)(3) charity organizations, through which donors can take tax deductions for their contributions.
"This is going to create, possibly, tax-deductible electioneering," Franz said.
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