Sunday, March 15, 2009
Posner on Tax Deductions for Foreign Charitable Donations
A while back, I took note of a blogospheric debate on the question of the deductibility of donations to benefit foreign charities (including foreign museums). Judge Posner discusses the issue at his blog this week. He's against deductibility, for primarily two reasons: (a) "[a]lthough charitable donations to foreign recipients will ... diminish if the tax deduction is repealed, there is likely to be some substitution in favor of domestic recipients, which will increase welfare in the United States" and (b) "to the extent that total charitable donations fall, tax revenues will rise, which is also a good thing." It's hard to tell to what extent his position depends on the current economic situation, or is general.