March 9, 2009

Choosing Where Your Taxes Go

You've probably heard about the latest controversy behind Obama's call to cap the charitable deduction rate at 28% even if you earn money in the 35% bracket (simultaneously proposed by Obama to be raised to 40%.) Here's what I like about the tax deductability of charitable donations. It's, in essence, letting me choose where my tax dollars go. Because for every $100 I give away to charities, I get to pay $28 dollars less in taxes (if I'm in the 28% bracket.) And technically, I wouldn't have to pay any taxes at all (if I give away a little more than I earn in a year.) The closer we get to a 100% charitable deduction rate, the closer we are to choosing what non-for-profits succeed. I think I'm more likely to trust an organization that is succeeding based on the populist belief that they are doing good things, rather than the ones who rely on lobbyist contracts.