The tax deduction for charitable contributions was an early feature of the US income tax code, introduced in 1917 because of a concern that the wealthy would stop donating to higher education when hit by higher taxes for World War I.
[…]
In total, therefore, charitable tax exemptions cost the Treasury about $130 billion, or on the cuckoo 10-year accounting used in budget calculations, some $1.8 trillion over the period 2011-2020 – which would make a decent dent even in that decade’s horrendous budget deficits. In addition, state and local tax exemptions for charities cost $30-50 billion. The charitable contribution income tax deduction is very inefficient according to a 2009 Congressional Research Service (CRS) study of the sector; thus its $54 billion cost increases charitable donations by only about $27 billion.
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Apart from charities’ adverse effect on the economy itself, there are a number of reasons why this could be a bad thing:
- The innumerable scams in charitable donations of automobiles and other property;
- The ability of Wall Street hotshots to leverage their social life through “charitable dinners” and other charitable events, a substantial portion of the costs of which are borne by much poorer taxpayers;
- The raucous propaganda and lobbying activities, almost universally in favor of bad public policy, by the charities themselves;
- The uncounted “hedonic” cost to the public as a whole of being subjected to continuous obnoxious fundraising.
Given charities’ averse effect on the economy, their own economic inefficiency, the great inefficiency of the charitable tax deduction and the disinclination of the very rich to give charitable donations to the poor, it is clear that the charitable deduction should be ended, as should the tax exemption for charities’ income, the tax exemption on their real estate and their other benefits from the public purse. Since excessive charitable activity is economically damaging, such activity should no longer be subsidized by the remainder of the economy.
“Just send us your cash.”
— George W. Bush on donations for Haiti
Yet another uncontrolled freedom that is in the eye of anal Progressives. Sorry control freaks, you can’t have a piece of it nor can you control to whom we voluntarily give.
Government shouldn’t be using the tax codes to influence behavior, no matter if it’s donations, buying a house, buying hybrids or manufacturing ethanol.
The only good thing about eliminating the Charitable Tax Credit is that it might put NPR, MoveOn.org, and Media Matters out of business.
(Oh, come on, you morons! You didn’t think Soros was funding out of charity? He needs a tax break! Same goes for the Rockefeller Trust, Ford foundation, etc.)
Why not?
Deductibility is a good way to get money transferred into a system that doesn’t have to involve government subsidies, programs, bureaucracy or intervention, yet still works for the common good.
I’m shocked by the number of scam charities running unchecked.
For a listing and review check out this site.
Is it a coincidence that the scammers contribute heavily to the pols?
No, at least not 1-to-1 and not on big donations. Taxes are a bill for government services, even ones you don’t receive.
Large donations can get you access, a good relationship, a way to pay indirectly, status, preferential consideration in deals, and jobs for idiot relatives. This a popular method for old money types to avoid almost all of their taxes.
The government should give some consideration to donations, but not dollar for dollar.
Especially get rid of tax breaks for religion. I don’t want to be subsidizing the property taxes of organizations that spread fairy tales.
#5
Faulty logic.
If charitable giving were not related to tax benefits then dropping the deduction would have no effect. Since that is obviously not the case there is absolutely a government subsidy taking place. The government is subsidizing the charities.
I would extend this to religions too. Tax ’em all and let god sort ’em out!
You know the thinking is screwed up when a tax deduction or exemption is regarded as a subsidy. Sheesh. It probably wouldn’t be a bad idea to let exempted entities handle welfare and remove government from the equation. But the goal has to be balancing the equations; other things would have to give. I believe the most important thing to address is employment; we need everyone on payrolls, and we need this before we hand out more subsidies, tax cuts, adding or removing deductions, and so on. In short we need to get both government and the private sector out of the business of fucking the general public.
Next must come banking reform; stop lending money out like drunken sailors on leave.
Follow this with sensible reforms to the insurance industry, particularly in health insurance. Obama came in sounding like he was going to do the right thing but ended up compromising everything with his omnibus system that doesn’t reform the insurance industry. So much for that.
Then change all federal domestic spending to include infrastructural reforms; we should be building or rebuilding roads, bridges, power systems, communication systems, water and sewer. With so much infrastructure on the fritz we shouldn’t have these ridiculous levels of unemployment.
Then we need to reform the transportation and security system; the TSA, and make flight a human experience again.
Then we need to reform the educational system, including reforming the students; do your homework, get away from the video game and play outside, with the other kids, for awhile.
Then we can go back to Uncle Dave and ask him to deal with the other problems the country has and deal with those before coming back to the non-issue of tax deductions for charitable and / or religious organizations. Sheesh.
#11,
uMM..
Show me your bills and I show you MINE.
Add up the basics, add 10%…then figure out the Wages to earn it.
$7 per hour, FULL TIME, ISNT GOING TO MAKE IT..
$10 per hour, FULL TIME, ISNT going to make it..
Figure out Poverty lvl…at $34,000 per year. Thats $17 per hour, FULL TIME.
TAKE tax out, FIRST..Thats over $10,000
RENT for 1 year..about $10,000
Utilities? $3000-5000+ per year.
Medical? Start at $1000 and go up fast.
Cable/sat/internet? $1200+
Cellphone? $700-1200+
BASE phone is $300-700.
GAS/FUEL??
Car maintenance?
FOOD? $2000+ to START
anything ELSE you want to add?
There is “a lot” of fraud even in charities that follow all the rules. Too many even well known ones are scams for the charity owners/operators themselves. That said, there is fraud and inefficiencies in every system there is. who knows where the net/net benefit of either approach would be?
Being a progressive statist of the immaculation, I would vote for no social engineering to favor the false promises of the various and sundry charities. Let the government collect enough money to provide what is needed under proper government scrutiny.
That means: proper government scrutiny. A jobs program funding an army of government internal auditors set loose on government programs. Give them a percentage of the fraud they reveal. It could work, probably wouldn’t more than the enthusiasm of the first 10 years==just like everything else. Corruption is a black hole and we are past the event horizon.
The question posed as such was peculiarly one-sided in it’s approach. Any astute individual will know that the results of any given survey are vastly influenced by the wording and ideas implemented in the very poll itself.
On the one hand: yes, there are scenarios where charitable institutionalism is being taken advantage of by charlatans. On the other hand: to allow taxation of ALL charitable donations is just another step towards big-government having an opportunity to become even bigger, and more intimately involved in our day-to-day lives.
This debate begs more research into the pro’s and con’s. I am sorry, but a one-sided blog-post poll is not going to crystallize my thoughts on the matter. It will however catalyze my interest, and cause me to further research a subject I otherwise might not have considered.
For these reasons I have chosen “not sure.” — for now (-:
If charitable donations were not tax deductible, then it should never be OK for the government to dole out money to any person, country, organization it deems ‘in need’. Depending on how you define ‘charity;, this type of spending now accounts for over half of government spending. (Especially when you include the recent bailout where the government printed money and gave it to other countries.)
So now a majority of government spending is being spend on things that any given person may view as offensive, wasteful, and downright repugnant. Let the government spend less on these things we will not agree on, and let the people make their own decisions on how to spend that money. Removing or further limiting tax exempt charitable contributions is the opposite of this, and will only lead to further divisiveness in politics, which leads to corruption.
Look at any government around the world and you will see that the more a government tries to control charities and money for charities, the more people in that country are in need.
$130 billion a year? Pish. Less than a state visit to India. Why don’t we talk about ‘real’ money?
#1
You haven’t the faintest clue do you?
Before the Federal Government got involved in the 1930s with assistance for the poor, the bulk upkeep was paid by the states and local governments, if paid at all.
So you would shift the burden back onto the states who have no way of being able to provide for the poor?
Prior to those state assistance programs starting at the turn of the 20th century, the poor lived in total squalor and elderly poverty rates were the highest of any age group.
What is even worse is that assistance to the poor is much smaller in percentage of federal spending than it is subsidising corporations.
Charities never receive enough to be able to assist many people. They could not when the population was decidedly lower than now and somehow they will magically do it with a population of over 300 million?
You are either uneducated about the problem or you are a rich person that has theirs and the hell with anyone else.
Cursor_
For one thing, if you are merely donating to charity to get a tax deduction, you are donating for the wrong reason. Secondly, if you give money to charity and then the government turns right around and gives that money back to you, isn’t it really the government who is giving money to the charity?
Silly question. The answer if YES because this legal tax evasion trick should be open to all citizens, not just the Church.
The real question is if the church should be taxed. – YES.
The sunday sheeple could be asked to contribute a non-tax deductible amount to pay for those taxes and maybe a little extra for the Vatican profit pyramid.
#12
There is an obvious subsidy. Let me use another example, like when you could get several thousand dollars of tax credits for buying a hybrid car.
In both instances government gives part of its income stream to someone else without receiving services directly. That is a subsidy. Whether that money routes through the government or a taxpayer pays less due a credit/deduction is unimportant.
#16
If you don’t like the job the military is doing, should your personal defense expenditures be tax deductible?
I would love a system where you could allocate your tax payments to types of gov’t expenditure. It would be absolute democracy. You could model the allocation app after a retirement account, because people have experience with those.
When you say:”Let the government spend less on these things we will not agree on…” that really means things that YOU agree with.
I find the US’s semi-random militarism(internationally) and drift toward soft-authoritarianism(domestically) distressing. Should I be able to allocate the national security portion of my tax monies to something practical like public infrastructure development?
#19 & #20
Exactly right!
Ha! Who gives $10 so they can save $2 on their tax bill? The entire idea of tax deductions to promote charity is stupid. Our tax system, if it must be on income, would be much improved if it was a simple flat rate with no expemptions or deductions, period.
I have never understood why people think a flat tax is fair.
For example, if the tax is 10,000 a year. That would be 25% of one persons wage 0.5% of someone elses. How is that fair.
Or is it a fixed % for everyone. That would leave one person 30,000 after tax but some waste od air snirio civil servant would pay more tax but have the same % left perhaps 90,000. Why should a teacher share the same % as a crook from Goldman Sachs?
Since clearly this is simply a way to increase taxes, I really hope that they also take away the tax exempt status of Religious Organizations. How much would the coffers of the Treasury would grow instantly in the Billions of dollars if Religious Organizations had to pay property taxes, the preachers’ and staff’s income taxes? Billions I say, BILLIONS.
Religion gets its’ money tax free and SPENDS its’ money tax free. CAN anyone create a better way to ripoff the sheeple?
“The innumerable scams in charitable donations of automobiles and other property;”
Yeah, because the .gov is run so perfectly
How about “should political/campaign contributions be tax deductible” ?
Having worked for a few “charitable” organizations in my time, I can tell you they are not all the same. I think the tax deduction is a great thing if it helps raise money for worthy causes. On the other hand, I suspect the average person would give just about as much with out the deduction.
I would like to leave you with these words. Examine your charity well. Some spend 30 or 40 cents of every dollar they receive on their own overhead. It strikes me as absurd that the CEO of a charity should pull down a high six figure income. I don;t like that they often hire professional fund raisers who work on commission. I despise charities that ask you to donate money for the tsunami in Libya and then spend the money raised to replant coconut palms in Iceland. I especially despise religious charities that expect recipients of aid to take a little sermon with their gruel. And just because it’s a big, well-known organization doesn’t mean they are not running afoul of one or more of these condemnations.
And, if anybody cares, I especially hate the Red Cross and Medicins Sans Frontieres. (The RC too often treats it’s staff as targets sending them into places they have no business being and, even though MSF uses “volunteer” doctors, they spend more on overhead then almost anybody. I wouldn’t be surprised to learn that 60 or 70 percent of their donations never make it to the needy. I once hired an MSF staffer and he was amazed that he was going to have to start buying his own cigarettes and booze.) End of rant.
Idiots..the only thing taxing charities will do is let the government (which is infinitely more corrupted than any charity could ever hope to be) borrow the country into even more debt against future “charity” revenues. this would it allow it to expand even faster..
this is a simple case of “don’t feed the trolls”
-the trolls in this case, being US GovCorps.
Clue: anything that further empowers the government, disempowers it’s people.
wake the f up, people.
-s
Yes. I would not have been able to have finished high school without the aid of the Lions Club. Which means that I would not then have won competitive scholarships to university and technical institutes. Anything that encourages patronage from the wealthy, needs to be encouraged.
Twice in the excerpt of the article given here is the phrase “…charities’ adverse effect on the economy…” which makes me question the bias of the author and the publisher. Why is the Asian Times being seriously listened to in matters of U.S. internal policies? Do you really think they have our best interests at heart? Hah.
Do you really think we would be better off if the Red Cross, the Salvation Army, Doctors Without Borders and the like didn’t exist? If people like Albert Schweitzer, Tom Dooley (http://en.wikipedia.org/wiki/Thomas_Anthony_Dooley_III) or Mother Teresa had gone into real estate speculation or injection-molded plastics instead?
And as for reducing the size of government to 1930s levels, well that worked so well for those prosperous, happy 1930s, didn’t it?
I’m all for tax breaks to encourage charitable spending. In Canada, donations to political parties are tax credits, not tax deductible. That burns my ass.