On September 17, by a vote of 203 to 220, the House defeated a Democratic substitute amendment to a tax bill that lets taxpayers deduct charitable contributions even if they do not itemize deductions on their income tax returns.
This Democratic substitute amendment would have increased social spending and retroactively cracked down on businesses and individuals who have used legitimate or what were eventually found to be illegal tax shelters in the past.
The goal of the underlying bill, The Charitable Giving Act (H.R. 7), supported by President Bush, is to change the tax code to make it easier for businesses and individuals to deduct charitable contributions when paying their taxes.
"The first provision [of the substitute], adds an additional $1.1 billion to the next fiscal year for the social services block grant," said Cardin. He added that the second provision would prevent anyone who is taking advantage of "tax shelters" from taking the charitable deductions. "I have not heard one complaint against the fact that tax shelters should be outlawed and there should be penalties for tax shelters," he said. "This bill deals with it in a responsible way."
Republicans argued against the amendment, stating that there are many kinds of "tax shelters" and the amendment would unnecessarily complicate tax laws and make it even harder for taxpayers and courts to interpret what sort of tax shelters are legitimate. Moreover, Rep. Nancy Johnson (R.-Conn.) argued, it could reduce revenues by causing tax shelters to become more secretive.
"Our own Assistant Secretary of the Treasury, Pam Olson, has stated that codifying the 'economic substance' doctrine could be counterproductive and would drive tax shelters further underground." She was referring to a specific court interpretation of what constitutes an illegal tax shelter.
Rep. Bill Thomas (R.-Calif.) pointed out that the Cardin amendment would take effect retroactively, so that tax shelters that have been legal for years would suddenly be retroactively taxed.
Others argued that the substitute was needlessly complicated, since the bill was supposed to focus exclusively on charitable giving.
"The effort to work with the Treasury Department and the administration on tax shelters is in a bill which should be before the committee at any time," said Rep. Roy Blunt (R.-Mo.). "This is a bill about charitable giving. It is a tax bill. We specifically eliminated the things about program delivery from a similar bill that the House passed last year because we wanted to focus on charitable giving. We did not want to focus on other programs."
Although McDermott, who eagerly votes to expand government entitlements at every opportunity, suddenly found religion on deficit matters, other Democrats were more supportive of Cardin's amendment.
Immediately after Cardin's substitute amendment failed, the underlying bill, H.R. 7, passed overwhelmingly by a vote of 408 to 13.
A "yes" vote was a vote in favor of the Democratic substitute for the Charitable Giving Act of 2003. A "no" vote was a vote against the amendment, which would have increased social spending and penalized those who have used legal tax shelters.
| FOR THE AMENDMENT: 203 | AGAINST THE AMENDMENT: 220 |
| REPUBLICANS FOR: 3 Castle Leach Tancredo DEMOCRATS FOR: 199 INDEPENDENTS FOR: 1 |
REPUBLICANS AGAINST: 219 Aderholt Akin Bachus Baker Ballenger Barrett (SC) Bartlett (MD) Barton (TX) Bass Beauprez Bereuter Biggert Bilirakis Bishop (UT) Blackburn Blunt Boehlert Boehner Bonilla Bonner Bono Boozman Bradley (NH) Brady (TX) Brown (SC) Brown-Waite, V. Burgess Burns Burr Burton (IN) Buyer Calvert Camp Cannon Cantor Capito Carter Chabot Chocola Coble Cole Collins Cox Crane Crenshaw Culberson Cunningham Davis, Jo Ann Davis, Tom Deal (GA) DeLay DeMint Diaz-Balart, L. Diaz-Balart, M. Doolittle Dreier Duncan Dunn Ehlers Emerson English Everett Feeney Ferguson Flake Fletcher Foley Fossella Franks (AZ) Frelinghuysen Gallegly Garrett (NJ) Gerlach Gibbons Gilchrest Gillmor Gingrey Goode Goodlatte Goss Granger Graves Green (WI) Greenwood Gutknecht Harris Hart Hastings (WA) Hayes Hayworth Hefley Hensarling Herger Hobson Hoekstra Hostettler Houghton Hulshof Hunter Hyde Isakson Issa Istook Janklow Jenkins Johnson, Sam Johnson (CT) Johnson (IL) Jones (NC) Keller Kelly Kennedy (MN) King (IA) King (NY) Kingston Kirk Kline Knollenberg Kolbe LaHood Latham LaTourette Lewis (CA) Lewis (KY) Linder LoBiondo Lucas (OK) Manzullo McCotter McCrery McHugh McInnis McKeon Mica Miller, Gary Miller (MI) Moran (KS) Murphy Musgrave Myrick Nethercutt Neugebauer Ney Northup Norwood Nunes Nussle Osborne Ose Otter Oxley Paul Pearce Pence Peterson (PA) Petri Pickering Pitts Pombo Porter Portman Pryce (OH) Putnam Quinn Radanovich Ramstad Regula Rehberg Renzi Reynolds Rogers (AL) Rogers (KY) Rogers (MI) Ros-Lehtinen Royce Ryan (WI) Ryun (KS) Saxton Schrock Sensenbrenner Sessions Shadegg Shaw Shays Sherwood Shimkus Shuster Simmons Simpson Smith (MI) Smith (NJ) Smith (TX) Souder Sullivan Sweeney Tauzin Taylor (NC) Terry Thomas Thornberry Tiahrt Tiberi Toomey Turner (OH) Upton Vitter Walden (OR) Walsh Wamp Weldon (FL) Weldon (PA) Weller Whitfield Wicker Wilson (NM) Wilson (SC) Wolf Young (AK) Young (FL) DEMOCRATS AGAINST: 1 |
NOT VOTING: 11
| REPUBLICANS (6): | DEMOCRATS (5): | INDEPENDENTS (0) |
| Cubin Forbes Miller (FL) Platts Stearns Rohrabacher |
Berry Gephardt McIntyre Rush Thompson (CA) |
