letter to the editor

Follow the numbers, not the rhetoric

Posted:  Monday, January 1, 2018 - 3:45pm
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Dear Editor:

I question the logic of a recent Forbes article claiming that because Trump’s tax cut bill doubles the standard deduction, donations to charity will drop by $13 billion because many taxpayers will no longer itemize their deductions, including donations to charity.

For a family of four, the net non-itemized deductions were $12,600 + $16,000 = $28,600, and they will be $12,600 x 2 =$25,200, an actual decrease of $3,400, specifically because the personal deduction of $4,000 x 4 will be gone. Add the fact that many young families have hefty mortgage interest deductions, and it will still make sense for those who have been itemizing, to continue doing so. Also, the $500/child tax credit increase will afford them additional money for charity.

For retired couples, non-itemized net deductions will go from $20,600 to $25,200, an increase of $4,600, but most use the standard deduction already because they have paid off their mortgages. Plus, the extra $4,600 deducted will cut their taxes by about $500, which they can then give to their favorite charity.

Finally, since the very rich will be losing many of their traditional itemized loopholes, they will be instructing their tax lawyers to recommend even more charitable donations, and anything else that reduces the amount of money getting into the hands of DC’s compulsive spenders.

Amazingly, this could be the first tax reform bill in history that benefits the economy, the federal budget, individuals, businesses, and charities, all at the same time.

Phil Molvar

Southport