End of Estate Tax Won’t Hurt Giving

To the Editor:

Concerning your article “Republicans in Congress Agree on Major Tax-Law Changes” (Tax Watch, August 12), I have never understood why it is better to give a bank $1 instead of giving the government 15 to 40 cents. Similarly, I have never believed that people make gifts primarily because they get a tax deduction.

When the top income-tax rate dropped from 70 per cent to 33 per cent, we all heard how donations would suffer as a result. Instead, we saw total giving rise as donors’ increasing prosperity helped drive their interest in giving more back to the community.

And now we hear that eliminating estate taxes will hurt major gifts by wealthy individuals. I have two points:

First, elimination of estate taxes does not eliminate income taxes and the deductibility that goes with them. Second, honest, decent people will always give money to causes that provide real benefit to the community over the long term, no matter the tax break.

For the moment, the point is moot. Politics won’t allow the current tax bill to survive in its present form. However, non-profit organizations really have little to fear from future changes in the tax system that reduce or eliminate certain taxes beneficial to donors.

Non-profit professionals are supposed to make sure that people of means know what we do and how they can help the community by supporting our organizations. Donors only looking for a quick tax break by giving away money discover, sooner or later, that unless the return is greater than one to one, it is, at best, a hollow exercise.

Our country was founded on the principle that small groups of citizens can resolve their problems better than any government can. At least that is what Alexis de Tocqueville said. It is that spirit that drives American philanthropy, not tax breaks.

People looking to benefit themselves and their community are at the heart of private support for charitable and philanthropic endeavors. Those looking for a quick tax break aren’t. Bank on the former and do a good job. That’s the only way to insure your organization’s continued ability to help solve problems the government cannot or will not solve.

Solving community problems is why non-profit organizations are supposed to exist — at least that is what I tell myself everyday as I try to convince people to do the right thing for my organization. Every once in a while they do. Funny how that works.

Samuel M. Prince
Director of Development
Legal Services of North Texas
Dallas