Fairness?
The director of OMB puts this forth as a reason for limiting charitable deductions by rich people:
UPDATE: I'm aware, of course, that current policy already includes limits on total charitable deductions, a phase-out of itemized deductions for higher incomes, etc. But I'm not sure why making it even harder for wealthy people to give their money away is an example of "fairness."
Third, there’s a question of fairness. Non-profits play a critical role in our society (indeed, I have worked at several of them in the past). But let’s look at how the tax code treats two different contributors to a non-profit. If you’re a teacher making $50,000 a year and decide to donate $1,000 to the Red Cross or United Way, you enjoy a tax break of $150. If you are Warren Buffet or Bill Gates and you make that same donation, you get a $350 deduction – more than twice the break as the teacher.That makes no sense. The only way that Bill Gates would get a larger deduction would be if he had paid that higher amount in taxes in the first place. Fairness and equal treatment would demand that anyone who donates $1,000 to a charity no longer has to pay taxes on that $1,000; and if some people had paid a higher portion of that $1,000 in taxes in the first place, then of course they would get a higher deduction. Under the new plan, though, some people will still be taxed (albeit at a reduced rate) on the same $1,000 that they donated to a charity.
UPDATE: I'm aware, of course, that current policy already includes limits on total charitable deductions, a phase-out of itemized deductions for higher incomes, etc. But I'm not sure why making it even harder for wealthy people to give their money away is an example of "fairness."
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