TAX DEDUCTIONS

The Idea:

Current law allows taxpayers to deduct their contributions to charitable organizations. By lowering the after-tax cost of donating to charities, the deduction provides an incentive for such donations. Only taxpayers who itemize their deductions (less than 25 percent of all taxpayers in 2016) can benefit from this provision in the tax code. The number of itemizers is projected to decline by 60 percent after the 2017 tax cuts. In 2016, donations accounted for 3 percent of Adjusted Gross Income (AGI) -- the term for taxable income when determining one's taxes). This means that without the ability to deduct charitable donations, fewer people will itemize on their taxes (more will use the 1040 EZ)

Instructions:

Please consider the following proposal for changing taxes. Please provide an analysis of this proposal. First explain what you consider to be theadvantages and disadvantagesof enacting this measure. What are some reasons why it would be a good idea to enact this? Are there any drawbacks or reasons why you would not want to enact this?

**YOU DON'T HAVE TO LIST ALL THE ADVANTAGES AND DISADVANTAGES, JUST EXPLAIN THE ENACTING MEASURE OF ADVANTAGES AND DISADVANTAGES**