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.
