Comments on: Sometimes Economists Don’t Make Cents http://views.eaglepeakpress.com/2009/03/30/sometimes-economists-dont-make-cents/ Seeing things as they really are, without the illusions or delusions Wed, 20 Jul 2011 13:19:53 -0700 hourly 1 http://wordpress.org/?v=3.1.3 By: Robert Patton http://views.eaglepeakpress.com/2009/03/30/sometimes-economists-dont-make-cents/comment-page-1/#comment-3250 Robert Patton Mon, 06 Apr 2009 20:53:16 +0000 http://views.eaglepeakpress.com/?p=233#comment-3250 I was confused by your post so I read Feldstein's article. The confusion started with him. Of course, no one would reduce a donation by $1000 to save $20, but this is not what would happen. Feldstein's $980 is the difference between 35% of $10,000 and 28% of $9000. Our hypothetical donor would no longer have the option of getting 35% off on a $10,000 gift so the proper comparison would be based on 28%. By reducing the gift to $9000 the donor would lose a $280 tax credit and therefore have $720 more to spend himself (or herself). This proves that Feldstein is even more incompetent than you thought (or, at the very least, a really bad writer). The real argument against Obama's proposal is that it is extremely unfair. Money donated is not part of spendable income and should not be taxed. I think most Americans would agree with that formulation. As a practical matter I look back on my youth when I could freely visit museums, zoos without any cost. If I had to pay admission my education would have suffered greatly. Those great institutions were supported by philanthropy. Now they are protected by gates and those who need them the most (the poor and disadvantaged) are no longer welcome. Bob I was confused by your post so I read Feldstein’s article. The confusion started with him. Of course, no one would reduce a donation by $1000 to save $20, but this is not what would happen. Feldstein’s $980 is the difference between 35% of $10,000 and 28% of $9000.

Our hypothetical donor would no longer have the option of getting 35% off on a $10,000 gift so the proper comparison would be based on 28%. By reducing the gift to $9000 the donor would lose a $280 tax credit and therefore have $720 more to spend himself (or herself).

This proves that Feldstein is even more incompetent than you thought (or, at the very least, a really bad writer).

The real argument against Obama’s proposal is that it is extremely unfair. Money donated is not part of spendable income and should not be taxed. I think most Americans would agree with that formulation.

As a practical matter I look back on my youth when I could freely visit museums, zoos without any cost. If I had to pay admission my education would have suffered greatly. Those great institutions were supported by philanthropy. Now they are protected by gates and those who need them the most (the poor and disadvantaged) are no longer welcome.

Bob

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