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Thursday, November 27, 2008


Tax Breaks For Charitable Giving Are A Stupid Idea

I see that my Senator, Byron Dorgan, is kicking off the holiday season with a call for more tax breaks for charitable giving.  Now on the face of it this seems pretty non-controversial, right?  Tax breaks for charitable giving is like spending increases for education.  It’s pretty much political suicide to oppose.

But let’s think about how this works for a moment.  First, the government takes a big, fat chunk of your income for taxes.  Then when you file your tax return you claim all sorts of deductions, charitable giving among them, and the government gives you some of your money back.

Isn’t that really…inefficient?  Why are we spending money on an army of bureaucrats who take money out of our pocket and then put some money back in our pockets when we claim certain things and then audit us to make sure we’re really doing what we’re claiming?  Wouldn’t it make more sense just to take less money from us in the first place?  So that then maybe we’d have more to give to charities in the first place?

Or more to spend in the economy?  Something that creates jobs, raises wages and ultimately results in fewer people needing charity?

If I could point to one of the biggest problems facing America right now, I’d say it’s the maze of deductions and refunds (and now “economic stimulus” rebates which are essentially bribes from in-power politicians sent out by the IRS) our tax code has become. 

The government uses deductions and rebates to manipulate how we live our lives.  If they want us to buy hybrid cars they create a deduction.  If they don’t want us to home school, they deny deductions.

And they use the sheer complexity of the tax code, made even more confusing by the refunds, to hide exactly how much we all pay in taxes.  Don’t believe me?  Ask your neighbor how much their last tax refund was.  Then ask them how much they’d paid in overall.  I’ll bet he/she remembers one but not the other.

I think we need to go back to a tax code that’s simple.  One source of revenue.  One set of tax rates.  No deductions.  No rebates.

Of course, then it wouldn’t be so easy to hide tax increases and the politicians would totally lose the ability to manipulate us with the tax code.  So fat chance of a fairer, more easily complied with tax code ever becoming a reality is between slim and none.

Does this tick you off? Click here to email your elected representatives right here on Say Anything, or comment below.

Comments

Yea I cant agree here.

Let’s not look at one of the valid deducations to make a case against the complexity of the tax code.


It’s all political bullshit. Liberals (and Robert108) lie and spin and twist and obscure and distract and cheat to protect their guys and hurt the opposing team. It’s like wrestling. They distract the ref while their team mate hits you with a chair. There’s no rule they won’t break, no law they won’t skirt, no crime they won’t forgive as long as they can win.

Kenny on November 27, 2008 at 02:28 am
Avatar for Pat

I agree that the present tax code is essentially behavior modification via taxation, and I think one of the worst effects is the loss of freedom of political speech for charitable organizations.  I do wonder how many jobs would be lost if a flat tax were implemented - not only IRS, but in the private sector.  In my opinion, that is one economic pain worth enduring. I’m entirely in favor of a flat tax (for all the good that will do).

Pat on November 27, 2008 at 06:58 am
Avatar for DG

Tax breaks for charity are the government’s way of admitting private charity helps the poor better that forced governmentr charity.

DG on November 27, 2008 at 08:09 am

It seems to me that the biggest problem is just the spending. 

If the government spent only money on what it really needed to do then the resulting taxes wouldn’t require us to jump through all of the hoops to keep our money.


1% of Americans pay 40% of the income tax.
5% of Americans pay 60% of the income tax.
10% of Americans pay 70% of the income tax.


The Whistler's signature
The Whistler on November 27, 2008 at 08:18 am

Charity is such a quaint idea that was fashionable before government got into it and took it over.2rwu8hs.jpg


No Free Lunch
25i20w9.jpg

Kevin on November 27, 2008 at 08:38 am
Rob
Rob
22122 comments
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I do wonder how many jobs would be lost if a flat tax were implemented - not only IRS, but in the private sector.

Well, if you think about the amount of money we’d save both in the cost of administering the current system on the government side and complying with it on the taxpayer side, there’s going to be a lot more capital flowing around.  And that means more jobs, not fewer.

Spreading out the tax base isn’t going to raise taxes on Americans who create the jobs.


The purpose of government shouldn’t be to do good, but simply to refrain from doing evil.

Rob on November 27, 2008 at 09:47 am

Good ole Dorganoff.


Check out:
Goon’s North Dakota Red Neck
Goon’s World

goon on November 27, 2008 at 10:28 am

Typical pomposity from someone who’s spent most of his adult life living off of the taxes of others, and he always will!148bhs.jpg


No Free Lunch
25i20w9.jpg

Kevin on November 27, 2008 at 11:53 am

t seems to me that the biggest problem is just the spending.

If the government spent only money on what it really needed to do then the resulting taxes wouldn’t require us to jump through all of the hoops to keep our money.

Whistler, than would make to much sense and we should now write on the calendar, today I have just agreed with you.

I give to a christian school a portion of our tithing.  If we and others like us did not do this, this school, K-8, would have to close their doors. We could not do this if it was not tax deductible in our present tax code.

Rob, I see what you were getting at and you confused my small mind for sometime until I thought about it for a while.


Gustave776 vampire

gustave776 on November 27, 2008 at 03:08 pm

One idea behind giving is to give an incentive to give, some people would not give at all if it were not tax deductible. I understand that the tax code is so massive no one person can understand all of it out it takes a group to figure it out and it should be changed, the charitable deductions could remain in place by a simple check off on the form . I am for a fair tax for all I never felt like the people that made a million should give over half of it to the government. Although there should be in place for the low wage earners a cut off of what is taxed and what is not , sometimes the only way someone who makes a paltry sum can survive is paying no taxes,I would not want some one who was on the brink to pay any taxes . the ones who are successful should not be penalized for making a lot of money .  I think at one time people in the upper bracket were paying 90% rate that is criminal .


“some days it is not worth the effort to chew through the restraints”

welder4 on November 28, 2008 at 04:55 am

Well it seems to me that the only progressivity that would be fair in the tax code would be an exclusion of income up to the poverty limit for everyone.


1% of Americans pay 40% of the income tax.
5% of Americans pay 60% of the income tax.
10% of Americans pay 70% of the income tax.


The Whistler's signature
The Whistler on November 28, 2008 at 07:52 am
Avatar for AndyinPhoenix

Imposing order of the US Tax code is a weak argument for for killing off the tax deduction for charitable giving. I don’t have good numbers, but I suspect a significantly bigger waste of missed tax revenue is scurilous business expenses above reasonable costs (lunch expenses greater that $50 per person, (travel by private corporate jet versus commercial coach class, business team-building retreats, etc.)

Another, better reason for leaving the deductions alone is that while killing off the tax deduction for charitable giving to churches and synagogues, the budgets and the positive affects of some civic and society charity-oriented organizations will be decimated.

AndyinPhoenix on November 28, 2008 at 09:05 am
Avatar for John D

I’m a Buddhist and we take responsibility for feeding the monks for one day a week. We also buy the flowers for the altar every week and for major celebrations. It’s a 50 mile round trip from our house to the temple.

We have been doing it for years and I never even considered taking a deduction. But last year I decided to keep track and it amounted to over $9000 with mileage.

But if they tood away the deduction it wouldn’t make any difference.

John D on November 28, 2008 at 02:43 pm
Rob
Rob
22122 comments
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Andy, I’d only support killing off deductions for charitable giving if it was part of an overall simplification of the tax code.  Something along the lines of ending all deductions for everything, and then passing the additional revenue (and savings in administration) on to the taxpayers.

That, I think, would result in a lot more available funds for charities.


The purpose of government shouldn’t be to do good, but simply to refrain from doing evil.

Rob on November 28, 2008 at 03:01 pm

I tend to agree with you, Rob; although my charitable giving averages about 10x that (percentage-wise) of most liberals, I’d be willing to give up the deduction if only the government would come back to the position that they had no business taxing the income that a man required to live.  Mona Charen noted a few years back that the deduction per dependent back in the 1950s would be worth somewhere between five and ten thousand dollars today.  Fix that, I don’t need to deduct my tithes.

Bike Bubba on December 1, 2008 at 10:49 am
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