[EL] Tax Credits/Deductions for Campaign Contributions

[Ellen Aprill]

Brad kindly points out my incredibly stupid mistake - so sorry.

The amounts for the deduction should be $1000 - a deduction of $1000 at 35%
marginal rate saves $350 in taxes and a deduction of $1000 at 15% marginal
rate saves $150.  A credit of $200 for each $1000 spent saves both
taxpayers $200.

I am now going to check and double check all the numbers I just did for a
bunch class problems - I bet I have just made a bunch of decimal errors
there as well.

Apologies again.

  Ellen
-------
Ellen P. Aprill
John E. Anderson Professor of Tax Law
Loyola Law School
919 Albany Street
Los Angeles, CA 90015
213-736-1157



On Tue, Jul 24, 2012 at 3:25 PM, Ellen Aprill <ellen.aprill at lls.edu> wrote:

> A reminder about tax credits vs tax deductions that might be useful for
> those who took tax long, long ago.
>
> A deduction by its very structure favors those with higher taxable incomes
> and thus with higher marginal tax rates (the rate on the next taxable
> dollar).  If a taxpayer's marginal tax rate is 35%, deducting $100 saves
> $350 in taxes.  If the taxpayer's marginal rate is 15%, a deduction of $100
> saves $150 in taxes.
>
> In contrast, a credit of, say, $20 for each $100 spent, saves both of
> these taxpayers the same amount of tax, $20. As Dan notes, that $20 will be
> a larger percentage of the taxes owed by the taxpayer with the lower income
> and lower marginal rate.
>
>   Ellen
> -------
> Ellen P. Aprill
> John E. Anderson Professor of Tax Law
> Loyola Law School
> 919 Albany Street
> Los Angeles, CA 90015
> 213-736-1157
>
>
>
> On Tue, Jul 24, 2012 at 3:15 PM, Dan Meek <dan at meek.net> wrote:
>
>>  Oregon has produced a table showing use of its political tax credit by
>> income level.  See *oregon*.gov/DOR/STATS/*tax*-*expenditure*-*report*-2011-2013.shtml,
>> page 197.
>>
>> Yes, higher income persons use the tax credit more often.  But lower
>> income persons get a larger percentage change in their taxes.
>>
>>   Dan Meek
>>  503-293-9021 dan at meek.net 866-926-9646 fax
>>
>> On 7/24/2012 2:44 PM, David Adamany wrote:
>>
>> Thanks for several posts with valuable information on tax credits and
>> deductions for campaign contributions.   The earlier studies showed use was
>> very heavy among higher income taxpayers and much lower among lower income
>> taxpayers.   These differences were much great than, for instance,
>> differentials in voting turnout between various income groups.   Can anyone
>> shed light on whether any of the plans mentioned in recent posts tend to
>> diminish disparities in political activities between high and lower income
>> strata?  Thanks again for helpful responses.
>>
>>
>>
>>
>>
>>
>> David Adamany
>> Laura Carnell Professor of Law
>> and Political Science, and
>> Chancellor
>> 1810 Liacouras Walk, Ste 330
>> Temple University
>> Philadelphia, PA 19122
>> (215) 204-9278
>>
>>
>>
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