Charities Getting Nervous
Can you blame them?
The Washington Post reports that since Obama first proposed to lower the charitable contribution deduction in 2009, more than 60 nonprofit groups have spent at least $21 million lobbying Congress and the White House to preserve it. And that’s because when folks give dough to those charities (something like 40 million of we and thee, each year) they claim a charitable contribution deduction, “costing” the government about $230 billion between 2010 and 2014, says the Congressional Joint Committee on Taxation.
Hence Obama’s most recent suggestion that this favor, among others, be forfeited by taxpayers in one way or another.
And charities aren’t the only ones squirming as the “fiscal cliff” looms closer. The Washington Examiner recently noted that when the 55% estate tax rate returns to the books, as Obama proposes, something like 526,000 family farms – about 25% of all farms in
America – will become the next goose to be cooked!
Nonetheless, while all this tax “fairness” talk reverberates, whatever happened to recognition of the fact – proven time and again in history – that lower taxes translates into greater productivity and prosperity for all? Quoth Thomas Sowell, in his pamphlet, “‘Trickle Down’ Theory and ‘Tax Cuts for the Rich'”:
“The facts are unmistakably plain, for those who bother to check the facts.
In 1921, when the tax rate on people making over $100,000 a year was 73
percent, the federal government collected a little over $700 million in income
taxes, of which 30 percent was paid by those making over $100,000. By 1929,
after a series of tax rate reductions had cut the tax rate to 24 percent on those
making over $100,000, the federal government collected more than a billion
dollars in income taxes, of which 65 percent was collected from those making
Even JFK was heard to utter, in 1962, that “It is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now.”
But Obama’s not alone in his idiotic, misguided, ceaseless drive to raise tax rates. Have you checked out California lately? Since the (retroactive) passage of the now infamous Proposition 30? Bad enough that the prop adds three percentage points to the top marginal tax rate, lifting the lid to a whopping 13.3 percent. Combining that number with Obama’s trophy, should he secure it, of a top rate of 39.6 percent, you get 52.9 percent. A nice fair number, don’t you think?
CONSULT YOUR TAX ADVISOR – This article contains general information about various tax matters. You should consult your CPA regarding the implications to your own particular situation.
Jeff Quinn, the author of this article, is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd., with offices in Incline Village and Reno. He can be reached at 831-7288, welcomes comments at firstname.lastname@example.org, and invites readers to consider his other commentary at http://blog.nolo.com/taxes.