The FairTax and Charitable Giving
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 U.S. society.
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Qualified not-for-profit organizations receive advantageous tax treatment under the FairTax and are not prohibited from certain types of political activities, as they are under the current system.
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Many assume that the level of charitable giving in America is driven by the tax code and tax deductions, concluding that if charitable donations were not deductible, then charitable organizations could not exist. Nothing could be further from the truth.
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Our Founding Fathers insisted that all citizens be taxed uniformly, to ensure that the tax code could not be used to reward the friends and punish the enemies of government. Where has the Johnson Amendment taken us?