|It is in the general interest of everyone for people to give money to charity. Often when money is given, so is time and talent. It is clearly important that we support charitable organizations.|
Taxation in our country it graduated, which means that in addition to paying more in taxes as people earn more, they may more at a higher rate, based on the "tax bracket" system. The percentage of your income that you pay in taxes increased as your income increases.
Charitable contributions are deductible from earned income, indirectly reducing taxes. The idea is there are some things that are beneficial, so the tax system encourages them. Interest on your home and charitable contributions are two examples.
Oddly enough, as your income goes up, the brilliant social engineers in Washington added in a small provision known as a "phase-out". Basically, the idea is that as you have more money, you don't need the deductions as much as other people need your tax money, so the government works it out so that the tax benefit of making contributions to charity goes away as you earn more money.
Here is what I don't understand.
If it is a good idea for people to give money to charity, and the government uses tax revenue to manage large scale charity, why is it a good idea to remove the acknowledged support for giving money to charity as people earn more money?
The only reason I can think of why the government would do this is that they don't trust us to give the money to the right people or organizations.
How about we re-think this notion, and remove this special provision in the tax code that phases-out charitable contributions. How about we just agree that giving money to charity is a good idea, and allow people that earn more to practice the same charity?
We could take a step to simplify the tax system (something the brilliant people in Washington think is too hard to do) and be more consistent with what we say we believe as a country.