Thanks for the example. That one is new to me, I’d seen references but not numbers.
You’re welcome. When you solicit donations from others you can also pay yourself a salary to run the foundation. So then those charitable donations really just amount to gifts.
(You can pay yourself a salary regardless, but IMO the outside donations make the Clinton’s’ foundation even more egregious than my example.)
who wants to create a foundation with me for aspiring actuaries in the Caribbean
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This x1000
No doubt. The question is, who gets to decide which kids and what content? Through private donations, the large donors will be the ones on the board and they will be the deciders. The alternative is to do it via the board of Ed, where it’s funded by taxes and run by elected boards.
Last but not least, if you feel strongly that the arts are worthy of support, then by all means do so. If you’re only doing it for the current deduction, then I don’t think that qualifies as feeling strongly. Does it really need a tax incentive?
Great example. No surprise that a pair of Ivy League lawyers know the ropes.
Meanwhile, I know a few less than wealthy people who volunteer at the food bank and soup kitchen. They ain’t doing it for the money, and eliminating the charitable contribution deduction wouldn’t change them one iota.
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Taxing the church is pretty deep in liberal Fantasy land, I’m just glad amazon and Tesla are not owned by the pope/caliph.
I think reasonable people can disagree on that. The deduction essentially allows taxpayers to have a direct say in how much government money goes to which organizations… if they are willing to put their money where their mouth is.
(Since a tax deduction only makes something cheaper… not free.)
We could have a whole separate thread about whether that’s a good idea or not.
A lot of employers do the same thing with matching gifts programs for employees. So there seem to be a number of people on board with the general principle. Although you don’t necessarily need to believe that what’s right for private employers is also right for the government.
Yep. I’ll bet most Americans would say that taxing churches is unconstitutional.
I view it differently – not taxing them amounts to “establishment” of religion. Suppose the gov’t had a matching gifts program for churches. If I give my church $300, the gov’t would add a $100 check from the Treasury.
I hope that most SC justices would say that’s unconstitutional*. But, we can get exactly the same economic effect from an income tax deduction if I’m in the 25% bracket. Somehow, that’s untouchable. Beats me.
*Okay, given our current court, where 66% of the justices are from the 6% of HS students who graduated from Catholic schools, this may not be a slam dunk.
It’s weird to me. Most American taxpayers pay more payroll tax than income tax. Charitable gifts are not deductible for payroll taxes.
Only 14% of the people who pay federal income tax itemize deductions. The others may give money to charity, but they do it without getting an income tax break.
But, somehow the charitable deduction on income taxes, which is important for just a small proportion of Americans, is untouchable.
Well I would argue that it was touched, not in a good way, by TCJA which basically eliminated the deduction for middle class homeowners.
If you’re going to have the deduction at all, having it available to middle class homeowners makes sense.
Of course they slightly put it back in for 2020 only in that folks taking the standard deduction can still deduct the first $300 of cash contributions.
AFAIK it’s officially still out for 2021, but Congress could and might put it back in.
Certainly the TCJA reduced the number of people who could benefit from itemized deductions, so the number itemizing decreased.
Unlike you, I think that was good policy. If it were up to me, we wouldn’t have any itemized deductions.
I have mixed feelings on increasing the standard deduction, to be honest.
9/11 wasn’t the reason for exploding deficeits. It was big tax cuts while starting 2 unfunded wars.
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I would like to hear the reasons why charitable contributions need to be tax deductible. Something beyond " it seems to make sense", I laid out my reasons. I’d be happy to hear you advocate for a $300 per household cap, for instance. I might go for that.
Just some evidence would be nice. I don’t buy the " essentially allows" line. It certainly doesn’t do that to my eye, since a tiny donation like $300 doesn’t pull any weight at the board meetings.
Is that a good goal? I don’t think it is. US Treasuries are an exceptionally good thing for financial markets. It bears remembering that the owners of all those t-bills could have cash instead of that right now but they choose to have t-bills instead.
Mainly because this is politically impossible to get rid of. People like donating to charity and they like the tax deduction. Why expand time and energy trying to get rid of something that people mostly like?
Ok, the aftermath of 9/11 that resulted in starting two unfunded wars.
I haven’t really advocated for a particular level of charitable deduction.
What I have said is that it doesn’t seem right that upper middle class and higher get to deduct their charitable contributions, but middle class & lower doesn’t.
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In essence isn’t the standard deduction covering just that and then some though? If I deduct charitable I don’t add it on top of the standard deduction, I start from zero.