A tax proposal that will make sense to everyone but our elected officials.....from both parties.

BACKGROUND

Most folks probably don't think much about how, exactly, charitable deductions work; either on taxes or in the real world.

There are any number of sites on the 'net which demonstrate, essentially, that $100 in charitable donations DON'T equate to $100 saved in taxes. In truth, charitable donations, for the sake of a tax deduction, are nearly worthless. (Let's be clear.....this is NOT to say that charitable giving is worthless!)

Here's an example of one of those sites:

http://www.thesimpledollar.com/charity-and-your-tax-bill/

Similarly, most folks don't think about the EFFICIENCY of money through either charities or the Government.

Folks should.

They REALLY should.

PLEASE....take the time to check out this web site:

http://www.charitywatch.org/

It rates charities by their efficient (or inefficient) use of money. In other words, it compares the percentage of each dollar taken in by a charity which ACTUALLY goes to the intended beneficiary (as opposed to which percentage is lost in costs and overhead of the charitable organization). By their standard, a charity that operates at better than 60% (60% of each dollar goes to the intended beneficiary), is a good charity. Obviously, the higher the efficiency rate, the better the charity, since a greater part of each dollar goes to the intended beneficiary.

The question, then, is "at what efficiency does our Government operate?"

Through the years, in many articles and research papers read, the efficiency rate of the Government is around 20%. I've seen it as high as 25%, but the overwhelming majority of reports I've read place it at below 10%. So, in order to be as fair as possible, I'll lean toward the higher efficiency.

But even as such.....even at DOUBLE, 40%.....the government would STILL be a lousy charity.

(BTW.....get used to using this percentage EVERY time you hear about the Government spending money. For instance, if they say that "$2 billion is being spent on..." whatever charity, understand that that $2 billion dollars equates to $10 billion in collected taxes. Just take whatever number they give you, multiply by FIVE, and you'll have an idea of how many tax dollars they had to collect in order to provide that number. THAT.....is how INEFFICIENT your Government is. And it's not just OUR Government, it's "government" that is inefficient).

TAX PROPOSAL

Here's how to a) VASTLY increase the effectiveness of charitable dollars and b) reduce your tax burden....so that you can greatly increase the strength of the private sector economy:

Create a "pure deduction" for charitable giving.

Here's how it works (I'm not using exact numbers. ONLY THE CONCEPT IS IMPORTANT):

Let's say you make $100,000.00 (taxable). So, let's say that you owe the government $35,000.00 in taxes.

And, let's say that your charitable donations totaled $10,000.00 for that tax year.

(In the current tax structure, you'd lower your income by $10k, making your taxable income $90,000.00.....which would change your 'owe' to the Government $31,500.00, a difference of $3,500.00, if you donated nothing to charity)

In this "pure deduction", your total tax burden, $35,000.00, would be reduced by YOUR TOTAL CHARITABLE CONTRIBUTION, or $10,000.00, making your 'owe' to the Government $25,000.00.

This would do two primary things:

1. Driver HUGE amounts OF VERY EFFICIENT dollars into charities.
2. Allow you to keep more of your hard-earned money, which you would very likely put right back into the economy, thus stimulating it greatly!!!

WHY IT WILL NEVER HAPPEN

This plan will NEVER happen for one reason and one reason only:

IT WOULD DEFUND AND DE-POWER THE GOVERNMENT. And they will NEVER willing allow this. NEVER.

Please share.

We, the people, CAN force the Government to bend to our will.