Question
Help on this.. Many people donate to charity. Suppose that originally the government does not provide a tax deduction for charitable donations, and the amount
Help on this.. Many people donate to charity. Suppose that originally the government does not provide a tax deduction for charitable donations, and the amount of charitable donations totals $10 billion. The government then changes the tax code and allows for all charitable contributions to be deducted from income when calculating taxable income. As a result of this policy, the amount of charitable donations rises to $11 billion. Assume the government has a flat tax of 20% on every dollar of income. Can you please explain in what ways is the new tax code is a success, and in what ways is it a failure? having a hard time understanding this concept.
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