Give back your tax cut



Are you unhappy with the tax cut deal that Obama struck with Republicans? Two Yale economists have made it easy to put your feelings into action.

In the recent tax deal, modest support for middle class Americans was combined with massive tax cuts for the rich. This is unfair: the rich don’t need the help. It is also inefficient: the rich will save rather than spend their tax cuts, so that cutting their taxes yields little stimulus per dollar of deficit. Can citizens adjust their conduct to counteract such wrong policy?

We believe that they can and propose a mechanism for doing so. The most fortunate citizens can convert their inefficient and unfair tax cuts into good fiscal policy. Rather than saving their new-found after-tax income, citizens who can afford it should donate their tax cuts to charities that promote the kinds of stimulative programs that better government policy would provide.

We’ve built a website to help achieve this — enables citizens to calculate their approximate tax cuts and, acting in concert, give them back to appropriate charities. Acting together matters here. First, each participant encourages others to join as well. Second, by tying giving to tax policy, donors emphasize that they are not giving out of private grace, but from a shared sense of the obligations of citizenship. They practice political philanthropy.

Read more. If you hurry you can count your contribution as a deduction on your 2010 taxes — unless you want the government to keep the cash.

At Give it Back you can designate which charity will receive your donation. We suggest Episcopal Relief & Development – Haiti.

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2 Responses to "Give back your tax cut"
  1. A good measure, but probably not enough to have much impact simply because most of the hyper-rich will not respond.

    Somehow everyone -- including those who are very rich -- needs to understand that the shift over the last 40 years of income toward the very highest income group is not just a moral issue. It has wrecked the "mechanics" of the national economy.

    First, two incomes became necessary for middle class families. As time passed even those families could not really afford the homes to which they had become accustomed.

    That led to the purchasing of one-family homes as investments by the rich, which led to overheating of real estate markets, and the creation of sub-prime mortgage loans. Then the bundling of sub-prime mortgage loans into investment bundles followed by the creation of derivatives for hedging on those bundles followed in the fall of 2008 by the near collapse of our banking system and severe breakage in our economic system.

    The inclusion of incomes above $1 million in the Bush tax cut was and is a very bad move for the future of our national economy.

    We should press our representatives in Washington of both parties to reverse it. Reversal is in everyone's interest because everyone will do better when the mechanics of our economy are fixed.

    More about this in Robert Reich's book "Aftershock".

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  2. It is time that we, as Christians, begin to speak about a "preferential option for the poor" once again and to live into that priority without apologies. This latest assault on the poor was perpetrated by lots of folks who are claiming the title of "Christian" as their own and it's just wrong.

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