I would rather have it said, ‘He lived usefully,’ than, ‘He died rich.’
- Benjamin Franklin
Many people erroneously ascribe to Adam Smith, the founder of modern economics, an ideological hostility to taxation that he did not in fact espouse. In his time, he would have been known as a “moral philosopher,” and his first work of any consequence was called, The Theory of Moral Sentiments.
The tax code has always recognized the multiple goals of taxation. Aside from revenue for the government, there is the intent to equalize the distribution of wealth, the desire to foster certain behaviors deemed ethically beneficial to society as a whole, etc. The charitable deduction provided by the Internal Revenue Code is an illustration of the goal to foster a charitable attitude and behavior in those who have achieved a measure of wealth. As with any generalized goals, there are opportunities for abuse. President Biden’s administration is looking to curb what it considers to be abuse in the use of the charitable deduction. Here is a link to a recent article that is relevant.
How can one resist an article that begins as follows:
“Last December, two Atlanta tax professionals pled guilty to a scheme that defrauded the IRS of more than $250 million in taxes.
“The scam claimed more than $1.2 billion in fraudulent charitable deductions through so-called syndicated conservation easements, a strategy most taxpayers probably have never heard of. . .
“. . . In the case of the Atlanta tax professionals, they promised more than $4 in charitable tax deductions for every $1 invested with “no economic risk.”
“Congress May Curb Abuses of This Charitable Deduction Used by the Wealthy”