My old friend Ashley sent a blog post detailing how the US Congress has passed a resolution fast tracking giving to Haiti onto people’s 2009 taxes such that they can maximize their deductions against the past year even though the tragedy happened this year. Here is a link to the post, and an excerpt:
Less than two weeks after the earthquake, on January 22, 2010, Congress pushed through a provision to benefit those that donate to Haiti relief efforts. The provision would allow taxpayers who itemize deductions to deduct charitable donations to qualified Haiti relief organizations on their 2009 tax returns. The donations must be in cash or cash equivalent. This means cash, check, credit card or debit card contributions – as well as text message donations. In kind donations, such as donations of water or medical supplies, won’t count for purposes of the accelerated deduction; those deductions will have to be claimed as they normally would, on a taxpayer’s 2010 return. To qualify, contributions must be made after January 11, 2010, and before March 1, 2010.
My big question on this topic in general is a quandry as to whether it’s ethical to allow for donations that don’t support local communities to be used in tax deductions in the first place. From what I can tell, the deductions are meant to reward people for investing in their communities. Deductions come for houses, having children, giving to charity all of which allow a community to grow and thrive (which are not things government can do itself). When one donates in a way which is effectively foreign aid, what we’re saying is that $1 that should go to after-school programs now goes to Haiti, and the government still doesn’t have that $1 to put towards after-school programs. Seems like this skews both the intent of the law, and the government’s ability to provide a social safety net here in the United States.
What do you think?