Minnesota tax proposal could cut charitable giving

  • Article by: Jon Pratt and Sarah Caruso
  • Updated: May 13, 2013 - 10:57 AM

The proposal eliminates one inequity but introduces another.

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pumiceMay. 12, 13 6:33 PM

Replace the charitable tax deduction with a credit for giving above a 2% threshold? That's backward! As Jesus said, "This poor widow's two mites are a bigger contribution than the wealthy Pharisee's two bags of gold. The poor widow's the one with skin in the game." (Or words to that effect.)

elmore1May. 12, 13 7:00 PM

Starting with attempting to plunder the pull tabs and now significantly higher taxes everywhere you turn. You bet charities are going to see a reduction in giving. Thanks Mark and DFLers.

jpcooperMay. 12, 13 8:11 PM

LOL! The DFL thinks by removing the deduction for charity the State will get more tax revenue AND the charity will still get their money! Another "watch out for the unintended Consequences"!

BTW My understanding of the credit is you get a 8% credit for every dollar over 2% of your AGI you donate!

Example: You make $100,000 AGI and you donate $2000, tax credit = ZERO! now if you donated $4000 you would get a 8% on every dollar over $2000. so $2000 x .08 = $160 tax credit!

Bye, Bye Charitable giving!

kraemer1May. 12, 13 8:16 PM

Charitable giving should be "charitable giving", not a way of shifting tax dollars to a charity. Who knows, if we published where our donations are going we might think that each other is making worse decisions then the politicians do as far as spending our tax dollars. I certainly don't like that so many people are giving my tax dollars to the Pat Robertson's of the world. Therefore I think that donations should not be tax deductible.

kilofoxMay. 12, 13 8:50 PM

After taxing Minnesotans to death they probably didn't think anything would be left for charity. This may give them the incentive to find more taxable income that they can spend.

supervon2May. 12, 13 9:07 PM

jpcooper. Thanks for that quick analysis. I'm done writing checks to charities. Game over.

kraemer1May. 12, 13 9:40 PM

Exactly my point surpervon2...if you can't give of your own money as a charity person, don't give for the tax deductions because you are then giving my money and I will probably not like where you are giving it.

misswootieMay. 12, 1310:18 PM

All charitable contributions should qualify for a tax benefit -- not just those made by people who can afford to donate more than 2% of their income. Rich people should not be the only ones whose contributions are rewarded.

mockingyouMay. 12, 1311:28 PM

i'm starting to wonder if people realize that % is a relative scale. perhaps these commentors need to go back to math class before trying to understand the tax code?

my4centsMay. 13, 13 6:38 AM

If this were not being done as a way to increase state revenue, I would think that the ideas behind this change are actually good. Most people on the lower end of the income scale already receive no deduction for their giving because they use the Standard Deduction on their income tax form. Changing to a credit at 8% would allow everybody the same benefit. In addition, the current tax benefit is based on your tax rate. Those with higher incomes receive a larger credit than those with lower incomes. Unless it is not a flat 8% credit, this would actually benefit most people. Certainly everyone who does not currently itemize their deductions. Of course, it will also complicate tax forms, since federal deductions would need to be added back in as state income - with donations treated differently for a credit. All in all, based on what I know, I'd say the general idea is a good one. However, it would be better to see this for our federal taxes, with MN simply following suit.


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