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https://qz.com/1092737/us-tax-reformers-should-get-rid-of-the-charitable-deduction-too-bad-they-wont/ https://qz.com/1092737/us-tax-reformers-should-get-rid-of-

https://qz.com/1092737/us-tax-reformers-should-get-rid-of-the-charitable-deduction-too-bad-they-wont/ https://qz.com/1092737/us-tax-reformers-should-get-rid-of-th...

bilbo0s 8y ago
This link concerns the overall idea of a charitable deduction, it's not really about the funds. My question was, "Why do DAFs need to be reformed?" Even if you got rid of the charitable deduction, you would still have things like DAFs and Foundations. Think of it this way, WRA came into being in 1917. But if you take, say, the Carnegie Foundation, that's been around since 1905 at minimum. So even without a charitable deduction, these foundations and DAFs would exist. So the question is, why do they need to be reformed? (Or, more precisely, why do DAFs need to be reformed?) You linked to an article explaining why you believe WRA to have been a bad idea. (Or maybe why you believe that WRA has become a bad idea? But either way, it's about the reforms introduced by WRA, not specifically about DAFs.)
- Eridrus 8y ago
  We should get rid of all charitable tax deductions, and then these funds would simply cease to exist, because they only exist to capture these tax deductions while preserving the donors' power. I don't have any beef with the foundations, I have a beef with our tax policy.
  - bilbo0s 8y ago
    >because they only exist to capture these tax deductions while preserving the donors' power... That's just not the case. The reasons that a donor might choose a DAF are legion. Again, I won't go into them all, but let's take an example that is more common than people realize. A donor who has passed on. Sometimes in life, a couple's children need encouragement to be kindly and generous. Let's put it that way. DAFs are part of a somewhat complicated legal framework that can have the effect of actually obliging heirs to share the family's resources. And of course there are a million other reasons that one might be motivated to use a DAF. Point being, DAFs are not solely used as a tax dodge. And the donors are not seeing the benefits from the tax dodge in any case, the vast majority of that benefit is going to the charities and the financial industry. (Heck, many of the donors have even passed on, so of course they don't care about any tax benefit. They made those arrangements for other reasons.)
    - Eridrus 8y ago
      I don't really believe that these other reasons are a major driver, but it also doesn't matter one way or the other, we can get rid of the tax benefits and let people keep the rest if they want. I agree that the benefit is largely not accruing to the people claiming the tax deduction, but it is a subsidy coming out of the public purse that we should get rid of. [EDIT]: Actually, I take that back, once you take into account the fact that the amount people donate is not significantly impacted by the tax situation, it seems clearer that the people getting the deduction are the ones getting the benefit/subsidy.
      - zip1234 8y ago
        It's not coming out of the public purse. Those are not the public's funds to begin with. The law was democratically decided to allow charitable donations.
        Eridrus 8y ago
        And we can democratically repeal the tax deductions.
- somecontext 8y ago
  For the benefit of others, it appears that "WRA" refers to https://en.wikipedia.org/wiki/War_Revenue_Act_of_1917 https://en.wikipedia.org/wiki/War_Revenue_Act_of_1917 This was surprisingly hard to determine, as it appears this is one of very few such references on the internet.
  - bilbo0s 8y ago
    Sorry. My bad. I should have defined what that was for people. WRA of 1917 is what introduced the charitable deduction to the tax code of the United States.

https://qz.com/1092737/us-tax-reformers-should-get-rid-of-the-charitable-deduction-too-bad-they-wont/ https://qz.com/1092737/us-tax-reformers-should-get-rid-of-th...

bilbo0s 8y ago

This link concerns the overall idea of a charitable deduction, it's not really about the funds. My question was, "Why do DAFs need to be reformed?" Even if you got rid of the charitable deduction, you would still have things like DAFs and Foundations. Think of it this way, WRA came into being in 1917. But if you take, say, the Carnegie Foundation, that's been around since 1905 at minimum. So even without a charitable deduction, these foundations and DAFs would exist. So the question is, why do they need to be reformed? (Or, more precisely, why do DAFs need to be reformed?) You linked to an article explaining why you believe WRA to have been a bad idea. (Or maybe why you believe that WRA has become a bad idea? But either way, it's about the reforms introduced by WRA, not specifically about DAFs.)

Eridrus 8y ago
We should get rid of all charitable tax deductions, and then these funds would simply cease to exist, because they only exist to capture these tax deductions while preserving the donors' power. I don't have any beef with the foundations, I have a beef with our tax policy.
- bilbo0s 8y ago
  >because they only exist to capture these tax deductions while preserving the donors' power... That's just not the case. The reasons that a donor might choose a DAF are legion. Again, I won't go into them all, but let's take an example that is more common than people realize. A donor who has passed on. Sometimes in life, a couple's children need encouragement to be kindly and generous. Let's put it that way. DAFs are part of a somewhat complicated legal framework that can have the effect of actually obliging heirs to share the family's resources. And of course there are a million other reasons that one might be motivated to use a DAF. Point being, DAFs are not solely used as a tax dodge. And the donors are not seeing the benefits from the tax dodge in any case, the vast majority of that benefit is going to the charities and the financial industry. (Heck, many of the donors have even passed on, so of course they don't care about any tax benefit. They made those arrangements for other reasons.)
  - Eridrus 8y ago
    I don't really believe that these other reasons are a major driver, but it also doesn't matter one way or the other, we can get rid of the tax benefits and let people keep the rest if they want. I agree that the benefit is largely not accruing to the people claiming the tax deduction, but it is a subsidy coming out of the public purse that we should get rid of. [EDIT]: Actually, I take that back, once you take into account the fact that the amount people donate is not significantly impacted by the tax situation, it seems clearer that the people getting the deduction are the ones getting the benefit/subsidy.
    - zip1234 8y ago
      It's not coming out of the public purse. Those are not the public's funds to begin with. The law was democratically decided to allow charitable donations.
      - Eridrus 8y ago
        And we can democratically repeal the tax deductions.
somecontext 8y ago
For the benefit of others, it appears that "WRA" refers to https://en.wikipedia.org/wiki/War_Revenue_Act_of_1917 https://en.wikipedia.org/wiki/War_Revenue_Act_of_1917 This was surprisingly hard to determine, as it appears this is one of very few such references on the internet.
- bilbo0s 8y ago
  Sorry. My bad. I should have defined what that was for people. WRA of 1917 is what introduced the charitable deduction to the tax code of the United States.