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View Diary: A tax break both parties can agree to limit (24 comments)

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  •  Wrong (2+ / 0-)
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    rodentrancher, Naniboujou

    The reason the charitable tax break overwhelmingly benefits the wealthy is because they have so many deductions that they exceed the standard deduction.

    In fact, most people that are less than 15 years into a 30 year mortgage exceed the standard deduction.

    But that little old lady that lives in the house that was paid for years ago that gives $5 a week to her church?

    She can't claim that.

    What should be done is to allow charitable contributions to be deducted off the tax liability (as a credit), not simply as a deduction from adjusted gross income.

    If need be, put a cap on how many dollars of charitable donations can be taken as a credit. $5,000. $20,000. $100,000.

    I don't know.

    But after the cap, charitable contributions can revert to the current system or some other. Rich folks hire people to prepare their taxes - no worries!

    But this way those less fortunate that willingly donate can see a real benefit.

    Form follows function -- Louis Sullivan

    by Spud1 on Thu Dec 12, 2013 at 07:40:10 PM PST

    •  As Noted in the Diary... (0+ / 0-)

      ...the rich disproportionately benefit because (a) they itemize (as you note) and, (b) they pay higher marginal tax rates, which means they get a higher charitable deduction.

      There are many ways to crack this nut (that is, recoup more tax revenue from the wealthy without severely impacting charitable giving).  But some of them, like a total dollar cap on all deductions combined, would fail on that second test.

    •  Simpler : get rid of the deduction (0+ / 0-)

      The poor cannot really take advantage of it, for the little lady who gives $5 a week to her church generally doesn't pay the income tax or pays it in the lowest bracket so she has nothing or very little to deduct from.

      On the other hand, the very rich are often very "tactical" on how they give (with lots of strings attached and, effectively, wholesale kickbacks) and how they use the deduction while getting a pretty large bang for their buck, given their marginal bracket.

      I deal in facts. My friends are few but fast.

      by Farugia on Thu Dec 12, 2013 at 07:59:53 PM PST

      [ Parent ]

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