Originally published at: https://boingboing.net/2017/12/30/subsidizing-young-earthers.html
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How do they get more back than they donate? I get that they’d be able to claim it against their income taxes and get the taxes back at whatever the top marginal rate is. But more than they sent?
They will get up to $1.37 in tax relief for every dollar they donate.
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Has Trump found Mrs May’s magic money tree?
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That’s what I’m not clear on. I’m not American. I thought tax relief just meant that you could deduct your donation from your taxable income. Is there something else going on here? Google is unhelpful.
I make say $61k. I donate $1000 to charity. I get back $205 in income tax (20.5% marginal rate in Canada) because my income has been reduced by that donation. I don’t get $1205 back.
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“The new tax plan, which takes money out of your pocket”
I’ve checked several estimators. According to each one our small family with an annual income under $75k will keep more money in our pocket under the new plan.
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Yes, it’s called the middle class.
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It WOULD pay them, IF it were to be implemented.
There isn’t any point in complaining about issue after issue if your perspective is framed as being essentially defeatist. I am beyond tired of so many on the left working from a loser’s script. Become the change you want to see…
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In the US, your tax debt is based on your gross income before taxes and you must prepay it to avoid a penalty. Then you get to apply deductions to that tax burden that is calculated independent of your tax debt, so if you donate $1000 in SC you can claim a charitable deduction of $1000 federally and then $370 from SC itself. This used to be capped by the alternate minimum tax that capped deductions and eliminated other loopholes, but that’s been targeted to an extreme by these tax reforms as well with the goal of allowing deductions to remove tax burdens entirely.
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Why do I feel this is part of the whole Dominion Theology push to indoctrinate an entire generation for their creepy stuff?
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So in the US, if I make $61k, it might calculate me as having say 12k in income tax. If I then donate $1k, I would get fully refunded that $1k from the federal government, and then an additional amount from the state government?
Does everyone just donate up to the maximum possible amount they can manage every year to charity, then?
I’m probably wrong about how it works here, too…
So you’re saying that they get to deduct $1370 from their taxable income, not that the government gives them a $1370 refund.
Because the article contradicts that “for ever dollar a millionaire in (say) South Carolina gives to a religious academy, the government will give him $1.37 back.”
Is there actually a scenario in which a $1000 donation becomes profitable?
No, they get $1370 from their tax debt not their income.
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Just so I have this straight - for every $1 donated to a Madrasa in the US, donors get $1.37 off of their taxes?
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Sorry that’s still not completely clear for me.
Do you mean, I could owe $10,000 in taxes, make a $1000 donation, and I now only owe $8630 in taxes?
Yes
And it’s really only beneficial to the extremely wealthy who get other benefits from charitable donations than charity itself. For most donations, you only get a small portion back in what you paid depending on what it is.
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Yes, according to @doctorow’s post.
I think that’s a tax deduction, which means you take home that, times your marginal tax rate. It could be worse.
Pennsylvania gives 100% tax credit for donations to private schools, which means if you don’t feel like paying any tax, just give all your tax dollars to Jesus. And then they pretend not to know why their public schools are failing.
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Let me try to work this through:
Scenario A: Richie Rich makes 1 million dollars, doesn’t give anything to private schools, pays $250,000 in federal income taxes, $100,000 in state income taxes (made-up numbers)
At the end of the day:
Richie Rich: $650,000
Federal taxes: $250,000
State taxes: $100,000
Private schools: $0
Scenario B:
Richie Rich gives $10,000 to private schools, sees his federal taxable income reduced by $10,000, gets a $10,000 state tax credit, with a marginal federal tax rate of 37%.
At the end of the day:
Richie Rich: $650,000 - $10,000 + $3,700 + $10,000 = $653,700
Federal taxes: $250,000 - $3,700 = $246,300
State taxes: $100,000 - $10,000 = $90,000
Private schools: $10,000
In scenario B Richie Rich increases the money that he gets to keep by 37 cents for every dollar that he donates to private schools. Nice trick!
Edit: the state deduction is on the taxes, not on the taxable income.
