Tax Reform Lessons Learned From State Experiments
Submitted by Steve on August 1, 2013
From Tim Delaney and Lisa Maruyama at Huffington Post:
As Congress begins to dive deeper into comprehensive tax reform, much depends on unproven projections and economic theories. Americans would be served better if Congress instead considered the real world lessons that states have learned by experimenting with limits on charitable tax deductions: local communities lose far more than governments gain.
States have learned the hard way about the vital nature of charitable giving incentives. Research in Michigan, for example, reveals that contributions have declined considerably since 2011, when the state repealed tax credits for donations to the work of food banks, homeless shelters, and community foundations. Missouri, which had allowed a series of tax credits to lapse, recently saw the need to restore them for giving to various charities, including food pantries.