[EL] Tax Credits/Deductions for Campaign Contributions

[Mark Schmitt]

And even better than a credit is a refundable credit, like the EITC, 
that can benefit even someone who doesn't pay state income taxes. 
Minnesota's credit is refundable, and you can get it as an immediate 
rebate.

Together with the 1:1 match on the contribution to the candidate, the 
Minnesota refundable credit begins to look a lot like a voucher, such as 
Bruce Ackerman and more recently Larry Lessig have advocated. Not 
surprisingly, 5% of Minnesotans contribute to a campaign (compared to I 
think much less than 1% in New York State), and donations of $250 or 
less make up more than half the candidates' total.


Mark Schmitt
Senior Fellow, The Roosevelt Institute <http://www.newdeal20.org>
202/246-2350
gchat or Skype: schmitt.mark
@mschmitt9 <https://twitter.com/#%21/mschmitt9>
On 7/24/2012 6:25 PM, Ellen Aprill 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 
> <mailto: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 <tel:503-293-9021> 	dan at meek.net
>     <mailto:dan at meek.net>	866-926-9646 <tel: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 <tel:%28215%29%20204-9278>
>
>
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