12 Days of Taxes: Dark money donations may be tax deductible thanks to tax bill passed by Congressmen Messer and Rokita


INDIANAPOLIS – The anonymous political donations unleashed in the wake of Citizens United decision will be tax deductible if the McConnell tax bill that Congressman Messer and Rokita voted for is signed into law.

The tax bill that passed out of the House includes a repeal of provision known the “Johnson Amendment.” Its inclusion is intended to allow churches and clergy the ability to freely and directly engage in politics without losing their tax-exempt status, but as CNN reports, it would ease political speech rules for all 501(c)(3) non-profits.

Currently, anonymous political donations go through 501(c)(4) organizations, who are allowed to engage in politics but whose donations are not tax-deductible. But were the Johnson Amendment repeal that House Republicans voted for signed into law, 501(c)(3)s would be able to endorse and support candidates and causes; their ability to spend money would be initially in a legal gray area but likely expand, according to the nonpartisan Campaign Legal Center.

Dark-money organizations would likely reclassify as 501(c)(3)s in that case, and anonymous donors would be expected to shift their donations from (c)(4)s to (c)(3), where they could be reimbursed for their spending through the tax code. That could unleash an even greater amount of anonymously-funded, dark money ads onto the airwaves as donors find that they have more money after taxes to plunge back into politics. “We as taxpayers would be effectively subsidizing these secret political contributions of the handful of billionaires that tend to fund our political campaigns,” Brendan Fischer of the Campaign Legal Center said.

Even before the law was passed, as much as $100 million was already expected to be spent on Indiana’s senate seat this cycle by political observers, much of that coming from dark money advertising through 501(c)(4)s.

“The Citizens United decision has poisoned our politics and given a clutch of unaccountable donors too much sway over our political process, so why would we go further and legalize fake charities that give them more money to spend?,” said Will Baskin-Gerwitz, Senior Media Strategist for the Indiana Democratic Party. “Hoosiers are already sick of negative dark money ads flooding their TV sets this cycle. Only for the McConnell tax bill would it be a good idea to unleash more of these unpopular ads on unfortunate viewers.”

This release is part of day two of the Indiana Democrats’ 12 Days of Taxes, a daily series highlighting the problems the McConnell tax bill would create if passed this holiday season. While the McConnell plan would raise taxes on middle class Americans to fund more tax breaks for the wealthy and major corporations, its consequences stretch across American life.


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