Why Should We Keep the Charitable Tax Deduction?
Charitable tax deductions result in government subsidized contributions to charities. It's a big loophole for the people to funnel public tax dollars to organizations that individuals choose. The public has no say in how these tax dollars are spent, or any knowledge what causes our money is supporting.
The larger the donation, the more public money you can leverage. The richer you are, the more public money you can spend on the charity of your choice. For less affluent individuals who don't itemize their deductions, charitable contributions do not reduce their tax bill.
Suppose a donor from the top tax bracket gives $3 to their favorite charity. When they take that charitable deduction, they get over $1 back.
They get a dollar back from whom? All of us. That tax dollar has to be made up by - you guessed it - the rest of us. So their $3 donation actually only cost them $2, and the rest of us have to make up the other third of their contribution. We don't have any say over which IRS approved charity our dollar goes to.
We Americans are spending public money without public consent on organizations whose missions we may not agree with. Worse, giving to religious organizations may even be unconstitutional. In the case of giving to churches, public tax money is subsidizing donations to religions.
Christians, Jews, Muslims, Mormons - any religion - all receive up to a 35% kickback from public coffers when someone donates. Churches are exempt from paying any taxes, yet benefit from the tax code in the form of the charitable tax deduction.
According to the U.S. budget, the charitable tax deduction "saved" donors $53.7 billion on their individual taxes. This charitable contribution, then, COST the rest of US taxpayers $54 BILLION dollars in 2011, because the rest of us had to pay $54 billion more in taxes to make up for the "charity" of other people!
This is not an argument against giving to charity; in fact, it's quite the opposite. Giving without expecting something in return is charity. If you give, and expect to get something in return, it's not really charity, is it?
Ending the tax break for charitable donations will decrease the amount that charities receive. But it will only decrease donations to charity in the amount that the rest of the taxpayers pick up. So give generously. But don't expect anything in return, and don't expect everyone else to pay you back for your donation.
Billions of dollars of tax money will be saved from ending the charitable donation tax loophole. Under our current tax system, a relatively few affluent individuals are determining where most of these billions of dollars of our taxes is going.
We should still use the money for good. Since it is public money, we (the public) should be able to have the opportunity to agree on what worthwhile projects it should be used for through our democratic process.