During this time of year many people are more apt to give to charities and that brings up the question “How will the FAIRtax affect charitable giving? Won’t I lose my tax benefit?” Charitable contributions depend on one factor more than any other: the health of the economy (not tax benefits). As a wide range of economists agree on the economic expansion the FAIRtax delivers, charitable contributions benefit also. For all the money that pours into churches and a broad range of charities every day, only 30% who itemize their income tax get any tax benefit. The other 70% have given and will continue to give with no tax benefit whatsoever. The FAIRtax allows people to make charitable contributions out of their pre-taxed dollars. Thus those less affluent taxpayers who do not itemize see their cost of charitable giving go down under the FAIRtax. Finally, the wealthy make decisions on charitable giving based on the cause. Once they have determined the cause is worthy, their contribution is structured to maximize the gift and minimize the tax. But the intention to give comes first; taxes simply determine the structure – rarely the amount – of the gift. For more information go to FAIRtax.org
