In response to:

The Charitable Deduction Should Stay

coldfish Wrote: Dec 13, 2012 7:06 PM
The article was actually about people using non-profits to bypass the taxes. For example, my child's preschool is a non-profit. You can pay the tuition, or you can make a "donation" of a slightly higher amount and they'll void your tuition statement. I donate 4k to them instead of the 3.5k tuition, I save money and it doesn't make a difference to them, but the government loses about $500 in revenue. The plan was to continue to allow that, but if your earnings are over 200k, then you can only deduct 28% of that "donation". So, the attempt was to stop people with a lot of money from abusing non-profits to avoid taxes, while letting the rest of us continue. Or, it's a secret muslim communist plot....
snappercat Wrote: Dec 13, 2012 7:14 PM
Why should you be allowed to continue "abusing non-profits to avoid taxes"? I really don't see why one person should be allowed a deduction that is denied to others.
psydoc Wrote: Dec 13, 2012 7:22 PM
They are not abusing non-profits. The non profit organization in coldfish's example get an additional $500. I would give a non-profit that I supported more money to be able to reduce my federal tax burden. At least by doing so, I select to whom my money goes. I know much better than sum grubrmnt bureaucrat to whom I want MY money to go.

Also, these deductions are not denied to others, anyone can do the same.
Joseph64 Wrote: Dec 13, 2012 7:31 PM
Abuse of non-profits does exist. Let's say Bill Gates and Warren Buffet both have a billion dollar gain they must report in the same year. In order to avoid taxes, Buffet donates his billion to Gates' foundation and Gates donates his billion to Buffet's foundation. They both still have control over the billion dollars indirectly through their non-profits only now they both have a billion dollar tax deduction they can claim and at 35% that means they both come out 350 million richer while the government comes out 700 million poorer.
Joseph64 Wrote: Dec 13, 2012 7:36 PM
And this is why they want the top tax rate increased. If it is increased to 39%, then instead of coming out 350 million richer, they come out 390 million richer. If we were living back in the days of Jimmy Carter when the top tax rate was 79%, they would get $790 million each .
Joseph64 Wrote: Dec 13, 2012 7:38 PM
Who do you think ends up paying for the shortfall in revenues with people like Buffet and Gates getting these kinds of returns on their charitable deductions? The rest of us who can't take advantage of those deductions to the same extent that they do, that's who.
Joseph64 Wrote: Dec 13, 2012 7:44 PM
Big corporations do it, too. That's why many of them have in house charities that they contribute money to every year out of corporate profits. That big tax refund from the government every April 15th goes a long way to paying other business expenses so the corporations are essentially running their businesses at our expense through the abuse of the tax code.
psydoc Wrote: Dec 13, 2012 7:46 PM
You seem to forget one thing, Joseph. Even though they avoided taxation, the non-profits are required to use a large percentage of their donated revenue each year. That may be a way for both Gates and Buffet to avoid taxes, but the non-profit is not abused.

I guarantee you, I would not feel abused if they donated that money to me. LOL

No conservative should really welcome tax increases of any kind.  But if there is one for which we should really hold the line, it's the charitable deduction.  It's not surprising that the Obama administration would want to do away with it; charities are one of the most important ways that a society can take care of itself -- and its poor and needy -- without relying on government.

Lessen charities' funding means reducing their reach and power.  Doing that through effectively increasing taxes -- that is, the state taking more instead -- is helping President Obama put the government at...