Feeling Undertaxed? Help Is On The Way!

[BPSCG]

Link (http://campbell.house.gov/News/DocumentSingle.aspx?DocumentID=87993)

On Thursday, I will officially roll out my “Put Your Money Where Your Mouth Is” Act, in a press conference in Washington D.C. This bill will amend the Tax Code to allow individuals to make voluntary donations to the federal government above and beyond their normal tax liability, and actually put a line on the IRS tax form to make it easier to make donations.

Last week, Presidential Candidate Senator Hillary Clinton stated that "We didn't ask for George Bush's tax cuts. We didn't want them, and we didn't need them."
It appears all this bill would change is adding the line to the 1040 form, since you can already make voluntary donations to decrease the national debt. Last year, the treasury got all of $2.6 million in voluntary contributions. Apparently even most liberals would rather keep their money.

[UnrepentantSinner]

Nice stunt. If only Congress would actually do something productive.

[Gagglegnash]

Hi

That's Hillaryous. Instead, can I spend my money on food, then put my FOOD where my mouth is, please?

I wonder how much extra the candidates have donated to the cause in the last three years... I wonder how I could find out....

[UserGoogol]

I actually think this could be a sincerely good idea, and have thought of it before. Although the ability to earmark somewhat where your donated money goes (what department it goes to or whatever) would be nice. Which seems fair, since it seems stupid to say a person who wants to increase funding for some set of programs has to provide funding to everything else the government to "put their money where their mouth is." Either way though it seems like a legitimately neat idea, and I can see myself potentially giving some amount of money. Although I imagine there are probably already mechanisms for donating money to the Federal government if you really really want to.

Of course, this is clearly being phrased as a sort of "Screw you, Democrats" gesture, but it doesn't seem utterly impossible that the Democrats could call his bluff.

[rjh01]

If you want to give your money away it might be better to find some charity to give it to.

[BPSCG]

If you want to give your money away it might be better to find some charity to give it to.But the government needs it more!

Why do you hate America?

[Fiona]

If you want to give your money away it might be better to find some charity to give it to.

Why ?

[BPSCG]

If you want to give your money away it might be better to find some charity to give it to.

Why ?Because if you give your extra money to a charity, you get a tax break. If you give it to the government, you don't.

Oh, wait, this is for people who want to give more money to the government.

[Fiona]

Oh, wait, this is for people who want to give more money to the government.

Yes :) Though you don't get tax relief on charitable donations in this country unless you are a higher rate tax payer and you make the donations through "gift aid".

[BPSCG]

Yes :) Though you don't get tax relief on charitable donations in this country unless you are a higher rate tax payer and you make the donations through "gift aid".What is the "this country" you are referring to? Pretty much everyone in the U.S. who itemizes their tax deductions - that's almost everyone who has a mortgage - can lower their taxes by making charitable donations.

[Fiona]

Scotland

[rjh01]

Also if you give it to charity then you know how the money will be spent.

[MattusMaximus]

Oh, wait, this is for people who want to give more money to the government.


I don't mind paying my taxes so long as I know they're going to something useful. On the local level, this makes it somewhat easy to keep track of I suppose, but as you go "up the food chain" to the federal level it gets almost impossible to follow.

I'm sure if you ask everyone on these forums, they'd find something the federal government is doing with their tax dollars they'd be pissed about.

[MattusMaximus]

What is the "this country" you are referring to? Pretty much everyone in the U.S. who itemizes their tax deductions - that's almost everyone who has a mortgage - can lower their taxes by making charitable donations.


That's what I do. I donate a lot to skeptic organizations AND I get the tax break! :D

[shadron]

I actually think this could be a sincerely good idea, and have thought of it before. Although the ability to earmark somewhat where your donated money goes (what department it goes to or whatever) would be nice.

That's easy enough to do; just write the destination on the check in the comment space, and someone will make sure it, or equivalent cash, gets there, providing they have a budget exceeding the size of our check. Of course, the money that you just replaced in their budget will probably be used to increase the war spending, or, more likely, interest on the debt, but fungibility is forever.

[UserGoogol]

That's easy enough to do; just write the destination on the check in the comment space, and someone will make sure it, or equivalent cash, gets there, providing they have a budget exceeding the size of our check. Of course, the money that you just replaced in their budget will probably be used to increase the war spending, or, more likely, interest on the debt, but fungibility is forever.

Yeah, I did realize that the Federal Budget is somewhat fungible after posting it. Although since Discretionary Federal Spending is explicitly directed to departments and programs by law, adjusting the budget along the lines of "Well, the National Endowment for the Arts got a bunch of donated money this year, let's cut how much money we give them and give it to the Department of Defense to make giant robots" would require a certain amount of explicit effort.

[Dan O.]

I've told people that if they want to give money to the federal government, buy treasury bills. That has the same effect but they get to decide how long the government can use that money and they will get it back if they change their mind.

[Fiona]

Also if you give it to charity then you know how the money will be spent.

Yes, that is indeed the problem with the idea :)

[Jaggy Bunnet]

Yes :) Though you don't get tax relief on charitable donations in this country unless you are a higher rate tax payer and you make the donations through "gift aid".

This is kind of correct, kind of incorrect.

If a basic rate taxpayer wants a charity to benefit by 100, they can give them 78 under gift aid, which enables the charity to reclaim 22 from the government. This is economically the same (ignoring admin costs) to giving a basic rate taxpayer relief on a donation of £100 @ 22%. Effectively relief is given "at source" by the payment from the government directly to the charity. Doing it this way avoids the need for basic rate taxpayers to make a claim to receive relief (a large number of UK employees, particularly basic rate taxpayers do not need to complete tax returns as all tax is collected through the PAYE system.) This is because the UK has very, very few deductions available from employment income (pension contributions being the main one).

A higher rate taxpayer who wants a charity to benefit by 100 does the same, but can then claim relief from higher rate tax on the income, meaning there tax bill is reduced by £18, so the net cost to them is £60. This is the same as giving tax relief on the whole donation at 40%. Part of the relief is "at source" as for basic rate payers, part directly on a claim in the tax return.

[Jaggy Bunnet]

What is the "this country" you are referring to? Pretty much everyone in the U.S. who itemizes their tax deductions - that's almost everyone who has a mortgage - can lower their taxes by making charitable donations.

Different systems / different outcomes. There are very few deductible expenses (particularly for employees) under the UK tax system. Charitable donations (under gift aid) and retirement savings are allowed, not much else is (e.g. mortgage interest isn't, medical expenses aren't, etc.)

[geni]

If you want to give your money away it might be better to find some charity to give it to.

It's a bit hard to find a legal way to fund a charity to invade random countries or develop nuclear weapons.

[Fiona]

This is kind of correct, kind of incorrect.

If a basic rate taxpayer wants a charity to benefit by 100, they can give them 78 under gift aid, which enables the charity to reclaim 22 from the government. This is economically the same (ignoring admin costs) to giving a basic rate taxpayer relief on a donation of £100 @ 22%. Effectively relief is given "at source" by the payment from the government directly to the charity. Doing it this way avoids the need for basic rate taxpayers to make a claim to receive relief (a large number of UK employees, particularly basic rate taxpayers do not need to complete tax returns as all tax is collected through the PAYE system.) This is because the UK has very, very few deductions available from employment income (pension contributions being the main one).

A higher rate taxpayer who wants a charity to benefit by 100 does the same, but can then claim relief from higher rate tax on the income, meaning there tax bill is reduced by £18, so the net cost to them is £60. This is the same as giving tax relief on the whole donation at 40%. Part of the relief is "at source" as for basic rate payers, part directly on a claim in the tax return.

Yes and no. The taxpayer pays out of taxed income but unless he is higher rate he does not get any money back. The charity gets the tax he has paid on the money: he does not. I think in the US the taxpayer gets the relief, unless I have misunderstood?

[thaiboxerken]

I might actually give more money to the government, if I got to decide how it would be spent. Right now, I'd rather not pay any more into the war than I have to, and I only do that because of the law.

[WildCat]

I might actually give more money to the government, if I got to decide how it would be spent. Right now, I'd rather not pay any more into the war than I have to, and I only do that because of the law.
A dollar is a dollar is a dollar, you are under the delusion that earmarking your extra contribution to feeding hungry children doesn't free up money for guns and bombs.

You're probably also shocked that state lotteries, with the proceeds going 100% to education, didn't actually increase education funding but only made more money available for other things.

Sucker.

[dirtywick]

You'll probably end up paying for the extra ink needed to add that line to the millions of tax forms they print.

[thaiboxerken]

A dollar is a dollar is a dollar, you are under the delusion that earmarking your extra contribution to feeding hungry children doesn't free up money for guns and bombs.

Wrong. I know that I have no real say in how any of my tax dollars are spent. Thus, I won't volunteer any more than is legal.

[BPSCG]

Thus, I won't volunteer any more than is legal.There is no legal limit on how much you can pay. So go ahead, pay all you owe, and then some. The IRS goons won't come after you.

[thaiboxerken]

I meant legally required.

[Jaggy Bunnet]

Yes and no. The taxpayer pays out of taxed income but unless he is higher rate he does not get any money back. The charity gets the tax he has paid on the money: he does not. I think in the US the taxpayer gets the relief, unless I have misunderstood?

That is why I said it is kind of correct, kind of incorrect. You are right in that the charity gets the money back, not the individual (assuming a basic rate payer) whereas in the US (as I understand it) the individual can claim a deduction against taxable income for the donations he makes, however the overall outcome is the same.

For example, US person wants charity to have 100. He gives them 100 and claims a deduction in his tax return reducing his tax by 22 (lets assume both countries have the same tax rate for ease of comparison). Result is that he has 78 less overall (100 donation minus 22 reduction in his tax liability) and the charity has 100.

UK person wants charity to have 100. He gives them 78 and they claim 22 from the government. He does not have to make any entry in his tax return. Result is that he has 78 less and the charity has 100.

In both cases the difference between the net impact on the individual and the total received by the charity is borne by the government. The difference is more in how this is achieved than in what is achieved.