# End tax deductions for giving to charity **URL:** \ **Category:** Great Debates\ **Created:** [March 6, 2016, 3:27pm UTC](https://boards.straightdope.com/t/end-tax-deductions-for-giving-to-charity/748117 "2016-03-06T15:27:54Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Telemark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/telemark/32/372_2.png) [@Telemark](https://boards.straightdope.com/u/Telemark)\ **Post date:** [March 17, 2016, 12:03pm UTC](https://boards.straightdope.com/t/end-tax-deductions-for-giving-to-charity/748117/21 "2016-03-17T12:03:17Z")
> [@doubled](#): > > Unlike every other economic activity, the entire point of charitable giving is to **give money away without receiving anything in return**. This is an unsupported assumption. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [March 17, 2016, 12:06pm UTC](https://boards.straightdope.com/t/end-tax-deductions-for-giving-to-charity/748117/22 "2016-03-17T12:06:15Z")
> [@doubled](#): > > Yes, of course it is. Unlike every other economic activity, the entire point of charitable giving is to **give money away without receiving anything in return**. Charitable donations are the only economic activity where you can’t compute a Return-On-Investment, so yes, of course there are different incentives. Except I just posted evidence that you’re wrong. You have posted no evidence to back up your claim. I also trashed your example about the charity race. So my question for you is whether you have anything to offer other than your insistence that my and others’ real economic activity doesn’t happen? ---
**Author:** ![asterion](https://avatars.discourse-cdn.com/v4/letter/a/4da419/32.png) [@asterion](https://boards.straightdope.com/u/asterion)\ **Post date:** [March 17, 2016, 12:51pm UTC](https://boards.straightdope.com/t/end-tax-deductions-for-giving-to-charity/748117/23 "2016-03-17T12:51:21Z")
> [@Shagnasty](#): > > There is a common misconception about tax deductions. I can’t tell if you are making it but you might be based some of your argument and I am certain that someone else reading this thread will make it because it is so common. > > A tax deduction doesn’t mean that you get to wipe out your tax liability dollar for dollar by donating money or goods to a qualified organization. For example, if you give $1000 to St. Jude’s Hospital, you don’t get to wipe out $1000 off your tax burden. Instead, you can subtract that $1000 from your income and use the adjusted number to calculate your taxes. The effect that will have on your overall tax bill depends on the rest of your tax situation but that $1000 donation will typically only knock about a couple of hundred dollars or less off the tax burden for an average person. I’m of the opinion that there should be a small AGI deduction available for charitable donations. If you’re like me and don’t have enough other deductions to itemize, any charitable donations are meaningless for the purpose of taxes. I’m not saying it should be as high as even $1,000, but maybe $500 or even $250. That’s enough to cover a reasonable amount of charitable donations an average person might make in a year. Keep the itemized deduction option as well and keep that subject to the 2% floor, or perhaps even increase the floor to something higher. ---
**Author:** ![Pearl\_Clutching\_Provocateur](https://avatars.discourse-cdn.com/v4/letter/p/c68b51/32.png) [@Pearl\_Clutching\_Provocateur](https://boards.straightdope.com/u/Pearl_Clutching_Provocateur)\ **Post date:** [March 17, 2016, 1:11pm UTC](https://boards.straightdope.com/t/end-tax-deductions-for-giving-to-charity/748117/24 "2016-03-17T13:11:51Z")
> [@doubled](#): > > And also, look at all the republicans who want to repeal the estate tax. I have family friends whose children are disabled. These friends are working diligently to make sure their children’s futures are secure as those children will need every penny once their parents pass away. Yet, the Leftists want to take those savings away to pad government pensions. ---
**Author:** ![Happy\_Fun\_Ball](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/happy_fun_ball/32/17664_2.png) [@Happy\_Fun\_Ball](https://boards.straightdope.com/u/Happy_Fun_Ball)\ **Post date:** [March 17, 2016, 1:33pm UTC](https://boards.straightdope.com/t/end-tax-deductions-for-giving-to-charity/748117/25 "2016-03-17T13:33:36Z")
This proposal would pretty much wipe out churches over a couple of decades. I like it. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [March 17, 2016, 2:25pm UTC](https://boards.straightdope.com/t/end-tax-deductions-for-giving-to-charity/748117/26 "2016-03-17T14:25:53Z")
> [@Happy\_Fun\_Ball](#): > > This proposal would pretty much wipe out churches over a couple of decades. I like it. I’m not sure it would. I’d want to see what percent of church donations get deducted today. Most returns aren’t itemized. ---
**Author:** ![Carryon](https://avatars.discourse-cdn.com/v4/letter/c/9fc29f/32.png) [@Carryon](https://boards.straightdope.com/u/Carryon)\ **Post date:** [March 17, 2016, 10:02pm UTC](https://boards.straightdope.com/t/end-tax-deductions-for-giving-to-charity/748117/27 "2016-03-17T22:02:58Z")
Not all non-profit organizations are charities and thus deductible. Also not everything is as obvious as you think. For instance, if you donate a building to your college it increases the value of the college. And thus is they sold the college or building it would be higher than if the building was never built. So you are increasing their assets as if you gave money. I work for a non profit and we are a charity too, so I can tell you without a doubt, when people donate, they like to be SEEN to donate. So this helps too. Anything that helps people to give money is worth it. In the end if you help the “rich” pay less, you’re only going to be taxed more for services to the poor, when the “rich” quit giving. ---
**Author:** ![UDS](https://avatars.discourse-cdn.com/v4/letter/u/ecae2f/32.png) [@UDS](https://boards.straightdope.com/u/UDS)\ **Post date:** [March 18, 2016, 12:57am UTC](https://boards.straightdope.com/t/end-tax-deductions-for-giving-to-charity/748117/28 "2016-03-18T00:57:38Z")
> [@Happy\_Fun\_Ball](#): > > This proposal would pretty much wipe out churches over a couple of decades. I like it. Very unlikely. Donations to churches are not tax-deductible in most other countries, and yet churches survive in those other countries. ---
**Author:** ![UDS](https://avatars.discourse-cdn.com/v4/letter/u/ecae2f/32.png) [@UDS](https://boards.straightdope.com/u/UDS)\ **Post date:** [March 18, 2016, 1:04am UTC](https://boards.straightdope.com/t/end-tax-deductions-for-giving-to-charity/748117/29 "2016-03-18T01:04:40Z")
> [@doubled](#): > > And also, look at all the republicans who want to repeal the estate tax, or eliminate the capital gains tax, or lower taxes on the wealthy. Sure, they always **say** this will incentivize people to work harder, etc. > But honestly ask yourself – suppose we could somehow 100% prove that eliminating the estate tax would not change anyone incentives. Do you think republicans would then stop asking to cut that tax? Seriously? No, not seriously, because I never said anything like this at all. Are you not reading my posts? Eliminating an estate tax will not incentivize people to work. But it will incentivize them to leave wealth to their descendants in their estates, as opposed to passing it on while still alive, or just spending it. Conversely, introducing or increasing an estate tax will disincentize leaving wealth on your death, and incentivize passing it on while still alive, or consuming it. People generally respond to economic incentives; that’s why markets work. So, the more heavily you tax a particular activity, the more you disincentivize that activity. Conversely, taxing it less heavily, or completely exempting it, incentivizes it. If you want to make the case that charitable giving, alone of all activities, doesn’t respond to these incentives, go ahead. But, evidence please; not just ever-more-strident assertions. ---
**Author:** ![SenorBeef](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/senorbeef/32/2220_2.png) [@SenorBeef](https://boards.straightdope.com/u/SenorBeef)\ **Post date:** [March 18, 2016, 3:55am UTC](https://boards.straightdope.com/t/end-tax-deductions-for-giving-to-charity/748117/30 "2016-03-18T03:55:52Z")
> [@Shagnasty](#): > > There is a common misconception about tax deductions. I can’t tell if you are making it but you might be based some of your argument and I am certain that someone else reading this thread will make it because it is so common. Right, this is part of a common misconception of what people think about as “write offs”. If it actually worked how people seem to think, why would anyone pay taxes at all? Instead just take the money you owed in taxes and send it off to your favorite charity. A simple way to think about this is: you’re not paying tax for the money you’re giving to charity. So if you make 50k, and give 5k to charity, you’re taxed as if you made 45k. Not that you’re able to pay $5k less in taxes. Or, to put it another way, if someone donates to charity, should they have to pay tax on that donation? If the tax rate is 20%, and they donate $1000, should they have to pay $1000+200? That said, the tax code is complex and there are probably ways it’s exploited. On the other hand, people often don’t give genuine charitable contributions enough credit, because they think “oh it’s just a write off for them” and don’t understand what that means. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [March 18, 2016, 3:42pm UTC](https://boards.straightdope.com/t/end-tax-deductions-for-giving-to-charity/748117/31 "2016-03-18T15:42:50Z")
> [@Omar\_Little](#): > > There is also a limit to the amount of the deductibility of your charitable contributions. So even if you donated 3x the amount of income you had in a single year, your charitable contribution deduction is limited to a % of your adjusted gross income (AGI). In addition there is a thing called the **alternative minimum tax (AMT)** calculation, so that no one that makes over a certain amount of AGI, gets away with not paying any income tax. That’s not exactly true. Sure, your charitable deduction is limited to your income for the year but that doesn’t really seem like a huge limitation. I don’t think the AMT affects the charitable deduction. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [March 18, 2016, 3:46pm UTC](https://boards.straightdope.com/t/end-tax-deductions-for-giving-to-charity/748117/32 "2016-03-18T15:46:51Z")
> [@brickbacon](#): > > And just to expound upon this point, the government isn’t gonna necessarily save money just because they could theoretically collect more in taxes. When a charity or non-profit is doing a vita public good, the government would often have to step in to provide funding for that absent the charity. For example, the Red Cross, which is a private institution with federal instrumentality, would need to exist in some form or fashion because blood donation is vital. Schools, homeless shelters, food banks, etc. are also like that to some extent. There would still need to be paid employees, services delivered, and complex organizations. > > It’s doubtful having the government collect a portion of that money that is being used and providing all the services would be more efficient. > > Yes, sometimes it is galling to see billionaires extract concessions or naming rights for their “charitable gifts”, or to see the church of Scientology treated the same way as a soup kitchen, but ultimately, we are better off with the system as it exists than one where no deductions exist. The only tweak I’d recommend is lowering the deduction percentage above a certain amount, and not allowing gifts of stock to affect any capital gains tax that would have otherwise been paid. I can agree with not allowing the escape of capital gains when donating appreciated stock but both of your proposals would reduce charitable giving significantly. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [March 18, 2016, 3:50pm UTC](https://boards.straightdope.com/t/end-tax-deductions-for-giving-to-charity/748117/33 "2016-03-18T15:50:04Z")
> [@UDS](#): > > We don’t know, though, to what extent the charitable tax deduction goes to donations that would have been made anyway, and to what extent it incentivizes donations that wouldn’t otherwise have been made, or larger donations than would otherwise have been made. > > But a good deal of tax policy revolves around incentivizing, both positive (deductions for donations, research and development, other particular investments) and negative (excise on cigarettes), so the general view must be that, yes, tax incentives do change people’s behaviour; otherwise governments would stop using them. And there may well have been research specifically on the effect tax deductions have for charitable giving. We know how much people who do not itemize their deductions (and therefore cannot take the charitable deduction) give (more than the people who itemize). And while I am not convinced that rich people would give MORE if we took away the charitable deduction, the stuff we really want to do (red cross type stuff) will not suffer by more than our revenues increase. Why exactly do we want to subsidize more money being donated to Harvard and Stanford? Do they need it? ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [March 18, 2016, 3:55pm UTC](https://boards.straightdope.com/t/end-tax-deductions-for-giving-to-charity/748117/34 "2016-03-18T15:55:35Z")
> [@Ruken](#): > > I’m pretty sure I would have donated less. Because I factor in tax deductions to my budget. Both my pre-tax savings and donations get a boost. It’s just an extra line in the spreadsheet. > If your friend’s 10-K to cure cancer cost $10,000, would you be less likely to run in it? I know I would. If it were 25% cheaper than the list price, would you be more likely? Supply and demand work their magic here, too. > > I’m going to let you in on a little secret. Some of us use our brains before opening our wallets. Do you? So lets say you would donate $150 with a charitable deduction. Would you have donated nothing without it or would you have donated something like $100 ($150 minus the tax savings lost) without the charitable deduction? If you would have donated something like $100 then the charitable deduction is merely allowing you to direct the expenditure of what would otherwise have been general tax revenue. Why should we do that? If they don’t get enough people to sign up at $10,000 because of the loss of the charitable deduction, perhaps they need tor educe the price to $7000. The math isn’t really THAT hard. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [March 18, 2016, 4:08pm UTC](https://boards.straightdope.com/t/end-tax-deductions-for-giving-to-charity/748117/35 "2016-03-18T16:08:49Z")
> [@Pearl\_Clutching\_Provocateur](#): > > I have family friends whose children are disabled. These friends are working diligently to make sure their children’s futures are secure as those children will need every penny once their parents pass away. > > Yet, the Leftists want to take those savings away to pad government pensions. So the estate tax doesn’t kick in until you hit over $5 million. If the husband dies and doesn’t use up the entire $5 million exemption, the wife’s estate has a $5 million exemption of her own PLUS whatever was left over from her husband’s estate. So their disabled kid can get over $10 million without any estate tax. Any estate above that threshold is subject to the estate tax which caps out at 40%. You can also remove those assets from consideration when determining eligibility for SSI and Medicaid for the disabled child through a special needs trust. Your friends sound like they might be able to afford a lawyer (or at least a computer that has access to google). ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [March 18, 2016, 4:13pm UTC](https://boards.straightdope.com/t/end-tax-deductions-for-giving-to-charity/748117/36 "2016-03-18T16:13:43Z")
> [@Happy\_Fun\_Ball](#): > > This proposal would pretty much wipe out churches over a couple of decades. I like it. I doubt it. The biggest effect the elimination of the charitable deduction would be on charitable giving from larger estates and a small number of religious charities probably soak up the lion’s share of that money. ---
**Author:** ![Algher](https://avatars.discourse-cdn.com/v4/letter/a/3d9bf3/32.png) [@Algher](https://boards.straightdope.com/u/Algher)\ **Post date:** [March 18, 2016, 4:17pm UTC](https://boards.straightdope.com/t/end-tax-deductions-for-giving-to-charity/748117/37 "2016-03-18T16:17:41Z")
> [@Damuri\_Ajashi](#): > > We know how much people who do not itemize their deductions (and therefore cannot take the charitable deduction) give (more than the people who itemize). And while I am not convinced that rich people would give MORE if we took away the charitable deduction, the stuff we really want to do (red cross type stuff) will not suffer by more than our revenues increase. Why exactly do we want to subsidize more money being donated to Harvard and Stanford? Do they need it? Stanford eliminated tuition for people from families who earn $125k or less, which right now is 30% of the student body. So, yes, they do some good stuff with those donations. I am a regular donor to help “pay back” the scholarships I received due to my lack of familial support when I attended. Now - I also welcomed the hinted pressure from Congress when the endowments were huge and the support for poor students was not matching the growth of the donations. Luckily the schools got ahead of the pressure and improved their support. I don’t have a control group to see how I would change my donation habits under a different tax scheme. I do know that I always hit the number of being able to itemize my donations, and I am happy to do it. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [March 18, 2016, 4:22pm UTC](https://boards.straightdope.com/t/end-tax-deductions-for-giving-to-charity/748117/38 "2016-03-18T16:22:12Z")
> [@Carryon](#): > > Not all non-profit organizations are charities and thus deductible. > > Also not everything is as obvious as you think. For instance, if you donate a building to your college it increases the value of the college. And thus is they sold the college or building it would be higher than if the building was never built. So you are increasing their assets as if you gave money. > > I work for a non profit and we are a charity too, so I can tell you without a doubt, when people donate, they like to be SEEN to donate. So this helps too. Anything that helps people to give money is worth it. In the end if you help the “rich” pay less, you’re only going to be taxed more for services to the poor, when the “rich” quit giving. So if we don’t subsidize the donation to build a new annex at harvard, then we will end up paying more money in taxes to build that annex at Harvard? What percentage of charitable giving goes towards programs to help the poor? [http://www.nytimes.com/2012/09/09/nyregion/bulk-of-charitable-giving-not-earmarked-for-poor.html?\_r=0](http://www.nytimes.com/2012/09/09/nyregion/bulk-of-charitable-giving-not-earmarked-for-poor.html?_r=0) Charity is not a substitute for a social safety net: [http://articles.philly.com/2013-05-02/news/38960249\_1\_charity-hunger-special-supplemental-nutrition-program](http://articles.philly.com/2013-05-02/news/38960249_1_charity-hunger-special-supplemental-nutrition-program) Speaking strictly from the perspective of the poor, we would be better off collecting the taxes and spending that money on the poor. ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [March 18, 2016, 4:26pm UTC](https://boards.straightdope.com/t/end-tax-deductions-for-giving-to-charity/748117/39 "2016-03-18T16:26:24Z")
> [@doubled](#): > > Many many tax give-aways have nothing to do with incentives and everything to do with pleasing constituents who would have engaged in the exact same behavior even without the tax “incentive”. Even if tax rules were motivated entirely to please constituents, this is completely independent on whether or not those same rules influence the behavior of others. > [@Happy\_Fun\_Ball](#): > > This proposal would pretty much wipe out churches over a couple of decades. I like it. Because no churches existed before charitable tax deductions. What? > [@Damuri\_Ajashi](#): > > Sure, your charitable deduction is limited to your income for the year but that doesn’t really seem like a huge limitation. Nitpick - Charitable tax deductions are not limited **to your income** for the year, they are limited **by your income**. If you have AGI of $100K, you cannot deduct $100K even if you donate all of it to charity. > [@IRS](#): > > [In general, contributions to charitable organizations may be deducted up to 50 percent of adjusted gross income computed without regard to net operating loss carrybacks. Contributions to certain private foundations, veterans organizations, fraternal societies, and cemetery organizations are limited to 30 percent adjusted gross income (computed without regard to net operating loss carrybacks), however.](https://www.irs.gov/Charities-&-Non-Profits/Charitable-Organizations/Charitable-Contribution-Deductions) ---
**Author:** ![Algher](https://avatars.discourse-cdn.com/v4/letter/a/3d9bf3/32.png) [@Algher](https://boards.straightdope.com/u/Algher)\ **Post date:** [March 18, 2016, 4:35pm UTC](https://boards.straightdope.com/t/end-tax-deductions-for-giving-to-charity/748117/40 "2016-03-18T16:35:27Z")
> [@Damuri\_Ajashi](#): > > We know how much people who do not itemize their deductions (and therefore cannot take the charitable deduction) give (more than the people who itemize). And while I am not convinced that rich people would give MORE if we took away the charitable deduction, the stuff we really want to do (red cross type stuff) will not suffer by more than our revenues increase. Why exactly do we want to subsidize more money being donated to Harvard and Stanford? Do they need it? Cite on the levels of giving of itemized vs non-itemized donors? [Previous page](https://boards.straightdope.com/t/end-tax-deductions-for-giving-to-charity/748117.md?page=1) [Next page](https://boards.straightdope.com/t/end-tax-deductions-for-giving-to-charity/748117.md?page=3)