CHARITIES WORRY AND WAIT
This is the title of a section in the Politico.com Morning Tax Report email. According to the report,
- Many charities are worried that some of the provisions of the new Tax Plan will reduce charitable giving;
- Since the only way to take a charitable deduction on your income tax return is to itemize, they are concerned that the near doubling of the standard deduction and the cap on the state and local tax deduction will lead to fewer people itemizing;
- Fewer people itemizing means that they believe charitable giving will decrease;
- A U.S. Trust survey found that 88% of high-income donors are expected to maintain or increase their contributions this year.
- The American Red Cross is advocating a universal charitable deduction available to all taxpayers, whether they itemize or not;
- This universal deduction would potentially create another $100 billion in lost revenue to the Treasury.
What the spokespeople for these charities are saying is that Americans will only give to charity if they are given a cash incentive from the income tax code, and everyone should be forced to subsidize the charitable donations whether they like it or not.
Do Tax Rates Affect Charitable Giving?
Many representatives of charities tell everyone that will listen that charities will actually close if the charitable deduction is eliminated. This is despite the fact that until this year, the deduction was only available to the 30% of taxpayers who itemize their deductions and in 2018 it will only be available to less than 10% of the taxpayers who are expected to itemize their deductions.
The position taken by these representatives of charities isn’t supported by history. Giving USA compiled the following chart showing charitable giving as a percentage of Gross Domestic Product:
The Philanthrophy Roundtable stated, “There seems to be something stubborn about that 2 percent rate.”
A report posted by the Committee For A Responsible Federal Budget, said that in 2011, of the $300 billion donated to charity, $125 billion was donated by people who did not itemize. This relationship probably stayed close to the same in the years since 2011 and, if the 2% average continues, even more of the charitable donations will come from Americans who donate not because of a “tax deduction” but because they want to help.
WHAT IS THE REAL VALUE OF THE CHARITABLE DEDUCTION
According to the Tax Foundation, there will be an estimated 137,905,563 personal income tax returns filed in 2015. The Tax Foundation estimates that 106,455,000 of those returns will pay taxes at a 15% rate or less. The Motley Fool did an analysis of the 2016 tax returns and determined that the average percentage rate of federal income tax was 14.9%.
While these tax rate percentages will go down some in 2018, the fact remains that for all but the most affluent Americans, the charitable deduction provided only a small benefit. For example, if a couple in the 15% income tax bracket donated $1,000 and deducted it from their federal income tax return, the couple would have received $150 dollars back for taxes already paid or owing and $850 of the donation would be from the couple’s income. If they did not donate to charity, the couple would have had $850 to use for things like a family vacation.
For many Americans the cost of paying an accountant to help prepare the more complicated itemized deduction schedule for their income tax return is more than the benefit they got from donating to charity.
It seems obvious that, based on the history of charitable donations, the thing that will help charities most is to more rapidly grow the gross domestic product of the U.S.
There is almost universal agreement that the U.S. GDP will grow more rapidly under a tax based on consumption, like the FAIRtax. If the historical 2% average continues, the larger the GDP, the more that will be given to charity.
The Beacon Hill Institute did a study on the effect of the FAIRtax on charitable giving. The report concluded, In the final analysis, the adoption of the FairTax would not decrease total individual charitable contributions. To the contrary, due to the price and income effects, among its other benefits, the FairTax would induce an increase in charitable contributions, subsequently strengthening the vitality of the charitable organizations that are so instrumental in their role in the U.S. society.
As humorist P.J. O’Rourke said, “There is no virtue in compulsory government charity, and there is no virtue in advocating it. A politician who portrays himself as 'caring' and 'sensitive' because he wants to expand the government's charitable programs is merely saying that he's willing to try to do good with other people's money.”
The FAIRtax provides the 90% who are not itemizing deductions on their income tax return the ability to donate to charity without paying any tax.
The truth is the truth. Remember, if we don't continue to tell the truth and demand a change, then this quote from George Orwell's 1984 may foretell our children's future:
“If you want a picture of the future, imagine a boot stamping on a human face—forever.”
WHAT CAN EACH OF US DO
Call up the local or D.C. offices of your House Member and two Senators and you can use the following script:
- I am sure that Representative ____ or Senator ____ is in favor of everyone obeying the income tax laws.
- After they assure you that their boss is not in favor of anyone breaking the law, ask if they are aware of the Cebula study showing $9 trillion of evaded income/payroll taxes over the next ten years.
- Since most will say they don’t believe their boss has seen the study, either drop off a copy or get an email address and send a copy to them for their boss.
- Say you are going to call back in a week and ask what the Representative or Senator is going to do to stop this evasion.
- In a week, call back and ask specifically what the Representative or Senator is going to do to enforce the law.
- They probably will say their boss believes that simplifying the income tax will handle the problem.
- Explain that when people evade income taxes, they are also evading the 15.3% payroll/Medicare tax and state income tax. So it is unlikely that they are going to pay 30% or 40% when they were paying 0% because they have already decided it is okay to cheat.
- Say that the only way to reduce evasion is to increase by tens or hundreds of thousands the number of comprehensive IRS audits done each year.
- Point out that Evaders do not self-identify by putting an “E” on their income tax return.
- 80% of the people likely to be audited are trying to comply, but they will be forced to endure these IRS audits as well.
- Ask if the Member is in favor of this?
- If they say no, then ask again how the Member proposes to stop people breaking the income tax laws.
- Then explain that the way to handle evasion without unleashing the IRS audits is the FAIRtax.
If you can see your Member or attend a town hall and ask these questions, you can be even more effective.
FAIRtax POWER RADIO
#132 HALLOWEEN, THE LOTTERY & THE TAX CODE
Using every day events, The FAIRtax Guys make the case for the FAIRtax.
Halloween, Mega Millions jackpot, gambling winnings, and Congress' tax plan of 2017. They (Congress) extolled the virtues of a consumption tax but then they ignored it in their final proposal.
So how does the Tax Cuts and Jobs Act of 2017 stack up to the FAIRtax? The FAIRtax Guys use Kerry Bowers comparison of the recently passed tax plan and the FAIRtax demonstrate how the FAIRtax is superior.
Help others learn about the value of the FAIRtax by turning them onto FAIRtax Power Radio - the ONLY weekly FAIRtax digital TV show in the country! Watch every Wednesday at 11:30 AM (ET). We are streaming to Facebook LIVE (www.facebook.com/fairtax). If you’re not a fan of Facebook, you can watch FAIRtax Power Radio on xcluded.tv at the same broadcast time - or any time.
FTPR podcasts for each show are posted on Spreaker (http://bit.ly/2oesbk7), iTunes & iHeart Radio every Friday morning. A free FAIRtax Power Radio app is available for iOS and Android. Since it’s a podcast, you can download it and play it whenever it’s convenient for you.
The Facebook videos are saved to a number of pages:
FAIRtax Official (https://www.facebook.com/FairTax/)
The FAIRtax Guys (https://www.facebook.com/thefairtaxguys/)
Democrats for FAIRtax (https://www.facebook.com/DemocratsForFairTax/)
and many others.
Xcluded.tv is a subscription based site which costs $30 per year and features a number of other shows along with FTPR with no commercial interruption.
Please help us educate as many Americans about the FAIRtax as possible. Be sure to tell everyone you know about this great new format for FAIRtax Power Radio. Whether you watch the weekly video or listen to the weekly podcast, this is a great way for more Americans to learn about the best tax reform plan in Congress at this time.
Tune into our video broadcast each Wednesday. Or, if you prefer, you can listen to the podcast of the show later. You can listen to FTPR on any platform - Mac or PC, iPhone or Android. And it’s 100% free. Listen on Spreaker.com (http://bit.ly/2oesbk7), iTunes (http://apple.co/1Te8VdF) or iHeart Radio (http://bit.ly/2eqEG7y) on your computer or smartphone. The easiest way to listen to FTPR on your smartphone is by downloading the free FTPR app. Just search for “FAIRtax Power Radio” in your app store, download the app and start listening.
Remember, FTPR digital TV every Wednesday at 11:30 AM (ET) followed by the podcast on Friday morning. Please listen and tell everyone you know about the FAIRtax Power Radio. The FAIRtax: Once You Understand It, You’ll Demand It!
AMERICA’S BIG SOLUTION - IN AN EASY TO CONSUME VOLUME
America’s Big Solution is a basic introduction to the FAIRtax and is meant for people of any age. And you can download it to your tablet or smartphone right now. It’s also available in print form. See below.
Do you know someone who would like an introduction to the FAIRtax and would prefer to read about it in a booklet rather than search online for Tweets, Posts and Shares? If so, America’s Big Solution is their best choice.
America’s Big Solution is an introduction to the FAIRtax written by Terry Tibbetts, author of A Spartan Game: The Life and Loss of Don Holleder, with help from Ron Maiellaro, President of the Florida FAIRtax Educational Association.
You can buy an electronic version of ABS as follows: AMERICA’S BIG SOLUTION is available for only $2.99 for the Amazon Kindle (http://amzn.to/1WIRHry), the Barnes & Noble Nook (http://bit.ly/1XeG8bH) and Apple iOS (http://apple.co/1tnqK0P).
You can purchase a print copy at the same Amazon link above for $9.25. Regardless of whether you choose the electronic format or the print format, you’ll find AMERICA’S BIG SOLUTION will give someone the boost they need to begin their study of the FAIRtax and the suggested resources to learn more. Buy AMERICA’S BIG SOLUTION now!
LINKS TO MORE INFORMATION
These links will help you promote and support the FAIRtax, make yourself familiar with the links below. We always do our best to keep our AFFT community up to date, and you can stay ahead of the curve using these convenient sites.
- The website of Americans for Fair Taxation (www.fairtax.org)
- Read the Summary of the Evasion Study.
- Welcome to the Online FAIRtax Community (member.fairtax.org)
- The website at which you can help make it happen. (www.bigsolution.org)
- The Facebook page for Americans for Fair Taxation
- The Facebook page for The FAIRtax Guys
- The Twitter page for Americans for Fair Taxation
- PopVox - Connecting people and lawmakers for more effective participation and better governing
- YouTube channel for AFFT
- YouTube channel for The FAIRtax Guys
- The Official FAIRtax Logo Store (www.fairtaxlogostore.org)
- Xcluded.tv - A new platform for FAIRtax Power Radio Video and other shows.
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