Saturday, January 27, 2007

Taxes and Poverty

I started my taxes today. There's a box that allows taxpayers to designate $3 to the Presidential Election Campaign Fund without increasing your tax due or decreasing your tax refund. I think it would be great if a similar box existed for donating to poverty.

I realize charitable contributions are tax-deductible. However, a tax deduction is not the same as a tax credit. I've often thought and have discussed with a few people that it would be great if people could get a special tax credit for donating to charities that fight poverty. This would be a compromise between (1) those who believe the US Government should foot the bill and (2) those who believe government is inefficient/ineffective and that individuals should donate to non-profits to fight poverty. Tax credits would, in essence, increase government spending on poverty without siphoning off too many additional funds to the inefficient bureaucracy. And it would still leave decisions up to individuals.

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