Libertarian policy on charity

[middleagedgamer]

Okay, read this one. Specifically, read point #2:

Poverty and Welfare | Libertarian Party

2. Establish a dollar-for-dollar tax credit for contributions to private charity

If the federal government's attempt at charity has been a dismal failure, private efforts have been much more successful. America is the most generous nation on earth. We already contribute more than $125 billion annually to charity. However, as we phase out inefficient government welfare, private charities must be able to step up and fill the void.

To help facilitate this transfer of responsibility from government welfare to private charity, the federal government should offer a dollar-for-dollar tax credit for contributions to private charities that provide social-welfare services. That is to say, if an individual gives a dollar to charity, he should be able to reduce his tax liability by a dollar.

Okay, the per capita income in this nation is currently about $40,000 - $41,000.

So, if the income tax is lowered to a flat ten percent, that gives us per capita taxes of $4,000.

So, what if a person takes that $4,000 and gives it all to charity? Does he pay zero income tax?

If everyone in the nation does that (which, according to their plan, is about easy enough to do it), then the federal government is left high and dry. They have virtually NO revenue, even to provide the most essential services that even the Libertarians want to keep, like the courts, the police, the military (yeah, they want to tone it down, but they don't want to abolish it), etc.

I mean, come on, people! The Founding Fathers gave Congress the power to collect taxes because they knew that a government needed a reliable source of revenue in order to function! If we do this dollar-for-dollar tax credit for charities, we'd have to either put caps on how much we can write off, which defeats the purposes of catering to private charities, or we have to replace the income tax system with something like a sales tax, which defeats the whole purpose of having this tax cut. Either way, you loose.

Thoughts?

 

[Zyphlin]

I think you're doing it wrong.

If we're taking an average of $40,000 as income and doing a flat 10% tax then yes, you have $4,000.

From what your above passage is saying though, if you pay $4,000 to charity you do not have a $0 tax, you'd have a $3,600 tax.

Why?

Because from the way I am reading it it seems that for every $1 you give to charity that is essentially $1 less that you technically have "earned", or the amount your liable to be taxed on.

So to have a $0.00 tax you'd need to give away ALL of your money to charity in the case of a flat interest rate tax.

Maybe I'm wrong but that seems to be what its saying.

 

[liblady]

I think you're doing it wrong.

If we're taking an average of $40,000 as income and doing a flat 10% tax then yes, you have $4,000.

From what your above passage is saying though, if you pay $4,000 to charity you do not have a $0 tax, you'd have a $3,600 tax.

Why?

Because from the way I am reading it it seems that for every $1 you give to charity that is essentially $1 less that you technically have "earned", or the amount your liable to be taxed on.

So to have a $0.00 tax you'd need to give away ALL of your money to charity in the case of a flat interest rate tax.

Maybe I'm wrong but that seems to be what its saying.

except, he is saying a dollar for dollar credit on tax liability, not a reduction in earnings.

 

[Zyphlin]

Hmm, maybe I'm misreading the original things comment on tax liability as essentially another way to say taxable income.

 

[Djoop]

I don't want a government that thinks they should regulate my donations to charities (one way or another). Simply not their mandate and none of their business.

This policy is not libertarianism imo, it's left wing liberalism.

 

[Gipper]

Although a novel concept, it would have an indirectly bad effect in that the IRS would become that much more pervasive in your life. As it is, as long as you stay under 500 bucks or a very small AGI percent, the IRS won't hound you. However, if you make charitable donations directly affect tax liability instead of just a write-off, it would invite audits to happen much more often, and documentation to be much more specific. It's the same argument behind why personal audits almost doubled last year because of the "cash for clunkers" and the first time homebuyer credit.

I don't know if I'd go dollar-for-dollar, but make it 50 cents on the dollar. That way, people willing to dodge liability by donating twice as much to a qualifying charity could do so, or if people simply wanting to pay the least amount possible can supply federal revenue.

 

[phattonez]

It's better than welfare, but I still don't like it. Government is not meant to legislate personal morality.

 

[Binary_Digit]

I may be missing something, but this doesn't seem to me like government legislating morality or regulating who we can make donations to. It's just a tax write-off, and if it weren't for tax write-offs for donations to charity, a lot of charities wouldn't exist. Maybe you could say this is inappropriate because government would be essentially funneling our tax dollars directly to charities, but that happens under current policies anyway and I personally don't have a problem with it. I won't speak for the whole platform, but I think charities are an important aspect of keeping government small while still having good social programs. It puts more responsibility in the private sector where it often belongs.

 

[phattonez]

I may be missing something, but this doesn't seem to me like government legislating morality or regulating who we can make donations to. It's just a tax write-off, and if it weren't for tax write-offs for donations to charity, a lot of charities wouldn't exist. Maybe you could say this is inappropriate because government would be essentially funneling our tax dollars directly to charities, but that happens under current policies anyway and I personally don't have a problem with it. I won't speak for the whole platform, but I think charities are an important aspect of keeping government small while still having good social programs. It puts more responsibility in the private sector where it often belongs.

It is in no way different than paying you to do something good. It is legislating morality.

 

[Porchev]

I think you're doing it wrong.

If we're taking an average of $40,000 as income and doing a flat 10% tax then yes, you have $4,000.

From what your above passage is saying though, if you pay $4,000 to charity you do not have a $0 tax, you'd have a $3,600 tax.

Why?

Because from the way I am reading it it seems that for every $1 you give to charity that is essentially $1 less that you technically have "earned", or the amount your liable to be taxed on.

So to have a $0.00 tax you'd need to give away ALL of your money to charity in the case of a flat interest rate tax.

Maybe I'm wrong but that seems to be what its saying.

I see it the same way, giving to charities in this case would have to just reduce your taxable income (dollar for dollar) like you said.

 

[middleagedgamer]

I think you're doing it wrong.

If we're taking an average of $40,000 as income and doing a flat 10% tax then yes, you have $4,000.

From what your above passage is saying though, if you pay $4,000 to charity you do not have a $0 tax, you'd have a $3,600 tax.

Why?

Because from the way I am reading it it seems that for every $1 you give to charity that is essentially $1 less that you technically have "earned", or the amount your liable to be taxed on.

So to have a $0.00 tax you'd need to give away ALL of your money to charity in the case of a flat interest rate tax.

Maybe I'm wrong but that seems to be what its saying.

No, you're reducing your tax liability dollar for dollar, not your taxable income. Tax liability is how much tax you owe.

Lowering your taxable income is the way it is, right now.

For example, if you have taxable income of $50,000, with a 10% income tax rate, that's $5,000 in income tax liability. As it stands, donating $1,000 to charity will reduce your taxable income to $49,000, reducing your tax liability to $4,900.

That's how it is now; that's what the Libertarians want to change.

Look up the definition of "tax liability," and juxtapose it with "taxable income."

 

[middleagedgamer]

I see it the same way, giving to charities in this case would have to just reduce your taxable income (dollar for dollar) like you said.

But, the Libertarians want to reduce your taxable income!

Read the blasted link I gave you! You often ask for citation and links; well, there's one right there!

if an individual gives a dollar to charity, he should be able to reduce his tax liability by a dollar.

Do you see that sentence? Huh? HUH? DO YOU SEE IT?!

 

[Porchev]

But, the Libertarians want to reduce your taxable income!

Read the blasted link I gave you! You often ask for citation and links; well, there's one right there!



Do you see that sentence? Huh? HUH? DO YOU SEE IT?!

Relax Francis, and I don't recall asking anyone for links.

And it only makes sense if it is lowering your taxable income, as in, you give $4000 to charity, then your taxable income is lowered by 4000, but you still pay taxes on the rest of your income.

 

[middleagedgamer]

And it only makes sense if it is lowering your taxable income, as in, you give $4000 to charity, then your taxable income is lowered by 4000, but you still pay taxes on the rest of your income.

Yeah, well, it doesn't.

Look up the blasted DEFINITION of "tax liability." That's what Libertarians want.

 

[Porchev]

Yeah, well, it doesn't.

Look up the blasted DEFINITION of "tax liability." That's what Libertarians want.

I like a lot of Libertarian Party ideas, but they are not a very united or well organized party so they will always remain tiny compared to the two main political parties. I do consider myself a libertarian leaning Republican. Anyway, again, maybe the Libertarian Party needs to look up "tax liability", because I think it should only be about lowering your taxable income. [If the Libertarians Party ever got their way, taxes would be significantly lower anyway...which is a great thing for the private sector and our standard of living since the private sector, amongst other things, has generated a huge abundance of food, housing, energy, and high tech medical technologies.]

 

[middleagedgamer]

Pochev, stop changing the subject. We're not talking about how well organized the Libertarian Party is; we're talking about whether or not their beliefs on the charity tax cut is legitimate.

Watch this video. Pay close attention to Rule #9.

[nomedia="http://www.youtube.com/watch?v=DIyr5TXqe8Y"]YouTube- How To Behave In Internet Chat Rooms[/nomedia]

 

[Porchev]

Pochev, stop changing the subject. We're not talking about how well organized the Libertarian Party is; we're talking about whether or not their beliefs on the charity tax cut is legitimate.

Watch this video. Pay close attention to Rule #9.

YouTube- How To Behave In Internet Chat Rooms

Are you now the internet etiquette expert? :lol:

Don't you list yourself as a libertarian?

The charity tax cut is legitimate if it reduces "taxable income". I think that is their intent. It just may not be articulated correctly.

 

[middleagedgamer]

Don't you list yourself as a libertarian?

I support a lot of Libertarian principals; look at avatar. I am merely weary about a select few of their policies.

The charity tax cut is legitimate if it reduces "taxable income".

Agreed

I think that is their intent.

Then, why do they say that it should reduce your tax liability?

It just may not be articulated correctly.

If they don't know the difference between tax liability and taxable income, they are in a position where a reasonable person in said position should have known.

A doctor is in a position where he should know the difference between bacteria and viruses.

A criminal defense lawyer is in a position where he should know the difference between murder and manslaughter.

And, a political party is in a position where they should know the difference between taxable income and tax liability.