‘One Big Beautiful Bill’ faces criticism over foundation excise tax hike provision – National

The “One Big Beautiful Bill Act” is facing criticism over a provision they say would devastate private foundations.

The budget reconciliation legislation would increase taxes on such organizations.

Under current federal law, private foundations pay a 1.39% excise tax on their net investment income. However, this measure would create a tiered rate structure, with marginal rates ranging from 1.39% to 10%, depending on the value of the foundation’s assets.

Republican lawmakers wanted to include the provision to combat wealthy organizations that push liberal agendas, like Bloomberg Philanthropies and The Gates Foundation, as Politico reports. However, it would also hurt conservative foundations.

Some of Trump’s wealthier backers from 2024, like former Education Secretary Betsy DeVos, businessman Elon Musk, and real estate Mogul Steve Wynn, would be affected. They have not publicly addressed this provision yet.

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Daniel Stid, a senior fellow at the American Enterprise Institute, said that while the proposal sounds like a clever idea, it would have unintended consequences.

“Republicans backing the tax hike may think they have an elegant strategy to punish left-leaning philanthropy, but it is too clever by half,” he wrote. “Many conservative foundations with mid-size endowments will still suffer the bite of these new taxes and have less money to grant as a result. And the next Democratic President and Congress will have every incentive to retaliate against their perceived enemies in the foundation world. It will be tit for tat.”

Leon Cooperman, a Republican donor and billionaire investor, dislikes the proposal.

Cooperman doesn’t think the GOP should raise taxes on foundations, arguing it will disincentivize philanthropy.

“The government continues its policy of tax and spend rather than focus on expense reduction. We don’t have a revenue problem but rather an expense problem,” he told Politico, adding that it, “won’t affect =me but I think [it will] adversely affect giving.”

Additionally, DonorsTrust CEO and president Lawson Bader opposes the provision. DonorsTrust is a nonprofit donor-advised fund that directs charitable donations to conservative and libertarian causes while letting donors remain anonymous.

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“They’re looking at the elites versus the non-elites. There’s a lot of money in foundations who would be defined as the elite, and therefore they like to see that money go elsewhere,” Bader told Politico. “This “seems to be really nothing more than a money grab that is – I think – tinged with some political DNA that has me uncomfortable.”