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Idea: Fund Health Care by Limiting Charitable-Donation Deductions

As this health care business heats up, so does talk about how to pay for it. Interesting piece on Andrew Sullivan's blog this morning about one...


As this health care business heats up, so does talk about how to pay for it. Interesting piece on Andrew Sullivan's blog this morning about one idea being floated that involves capping charitable donations (which are then written off on people's taxes). If it picked up steam, and it probably won't, it would hit the rich hard because, in the simplest of terms, wealthy donors wouldn't be able to write off as much, and thus would have to pay higher income tax. By removing a key incentive for giving, it would also, of course, hit nonprofits hard as well.In Conor Clarke's piece, he argues that any way you cut it, the way we treat charitable donations is regressive. "The deduction is unfair," he writes. "You can deduct gifts from your income tax liability at your top marginal rate. So, if you are in the highest tax bracket you can deduct $350 for a $1000 donation. If you are in the lowest tax bracket you can only deduct $150 on a $1000 donation."He goes on to explain that while most of us think of charitable giving as donating to your favorite nonprofit or the Sally Ann, that actually there are many more organizations that qualify and not all of them are terribly, um, charitable.It's an interesting ides, but a controversial one of course. There have been a few ideas floated recently that involve taxing/targeting the rich, all of which feel very Canadian to me. It'll be interesting to see what happens.Image via
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