Just in time for Christmas: Charities get the shaft in tax bills

Christmas is still several weeks away, but it looks like the Grinch visited Capitol Hill early this year. There's no other way to explain a greedy, rotten scheme proposed by lawmakers who want to start snatching money from charities that are not supposed to be taxed. Thurl Ravenscroft must be turning over in his grave.

Nonprofits commonly license their names and logos to appear on products such as shirts, hats, bumper stickers and credit cards. They use the royalties generated from those items to help fund their charitable efforts. Since these revenues go directly back to nonprofit organizations, they have never been subject to federal taxes.

But that could change if a few Republican senators get their way.

Rather than making tax reform numbers add up by cutting wasteful federal spending or eliminating tax breaks for favored industries, unprincipled lawmakers think Uncle Sam should raise revenues by taxing nonprofits on the money they earn through name and logo royalties.

The idea should be downright despicable to people on both sides of the aisle – and to anyone not named Ebenezer Scrooge. It would rob money from beloved charities that educate children, protect the environment, comfort the ill, lend a hand to the needy and provide opportunities for the disabled.

[GOP needs tax reform, or the Democrats will clean up in 2018]

For example, the proposal would drain millions of dollars from Sesame Workshop, the nonprofit organization behind Sesame Street. Sesame Workshop uses the money it raises from licensing Big Bird lunchboxes, Tickle Me Elmo dolls and Cookie Monster t-shirts to provide educational resources to children.

The tax also stands to threaten the health of Americans by stealing hundreds of thousands of dollars annually from the American Heart Association and the American Cancer Society. Since the tax would also target the United Way, Feed the Children and the Humane Society, less money would be available for community organizations, afterschool programs, food banks and animal shelters.

Veterans groups, including the Wounded Warrior Project, Disabled American Veterans, Team Rubicon and Vietnam Veterans of America, are able to assist thousands of vets every year through the products they sell – from Team Rubicon sweatshirts to Wounded Warrior Project-branded Swiss Army knives to patches, pins and hats featuring the Vietnam Veterans of America logo. Under the tax proposal much of that money would dry up, leaving many of America's heroes without vital resources.

The tax scheme would particularly harm charities that are near and dear to many Alaskans, and that play an important role in the state's environment, economy and future. And as a long-time member and officer in several law enforcement fraternal orders and associations, our organizations would feel the sting too. Imagine Safety Bear in permanent hibernation?

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I'm a member of the National Rifle Association. The NRA, which spends significant sums to promote hunting, gun safety and shooting ranges in Alaska, could lose as much as 5 percent of its annual budget if Congress passes a tax on nonprofits' licensing royalties. Land management and wildlife conservation organizations, including Ducks Unlimited, the Sierra Club, the Nature Conservancy and Defenders of Wildlife, would also lose out if Congress enacts the outrageous tax – as would a number of charities focused on serving Alaska's children and youth, such as the Girl Scouts and Boy Scouts, and the Boys and Girls Club.

Fortunately, Sen. Lisa Murkowski is well-positioned to put an end to the shameful proposal to tax earnings related to the use of charities' names and logos. Alaska's senior U.S. senator is considered a key vote in deciding the fate of the tax. By opposing the scheme, Sen. Murkowski can help ensure nonprofits like the Boys and Girls Club, the NRA, Ducks Unlimited, the Humane Society and the Wounded Warrior Project are allowed to continue their important work in Alaska without being devastated by a ridiculous new tax.

Congress is wise to consider different ways to lower the tax burden on taxpayers and job creators, but tax reform shouldn't come at the expense of some of America's most important charities.

Only a Grinch would pilfer money from nonprofits that rely on every penny they earn to help their neighbors and improve their communities.

Tom Anderson is a partner at Optima Public Relations and a former director of the Alaska State Troopers.

The views expressed here are the writer's and are not necessarily endorsed by the Anchorage Daily News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary@adn.com. Send submissions shorter than 200 words to letters@adn.com or click here to submit via any web browser.