[EL] Tax Credits/Deductions for Campaign Contributions

Wed Jul 25 06:13:16 PDT 2012

As mark points out, Minnesota's "tax refund" program for campaign contributions up to $50 from individuals, in which any individual essentially can make a "free" $50 campaign donation reimbursed by the state, was indeed a remarkable program and encouraged small contributions in state campaigns.

Very unfortunately, Gov. Pawlenty defunded the program, so while the law is still on the books, there are no funds to pay for it.

Craig Holman, Ph.D.
Government Affairs Lobbyist
Public Citizen
215 Pennsylvania Avenue SE
Washington, D.C. 20003
T-(202) 454-5182
C-(202) 905-7413
F-(202) 547-7392
Holman at aol.com

-----Original Message-----
From: Mark Schmitt <schmitt.mark at gmail.com>
To: law-election <law-election at department-lists.uci.edu>
Sent: Tue, Jul 24, 2012 7:22 pm
Subject: Re: [EL] Tax Credits/Deductions for Campaign Contributions

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
        202/246-2350
        gchat or Skype: schmitt.mark
        @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>          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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