Anyone who doubts the federal income tax deductionA tax deduction is a provision that reduces taxable income. A standard deduction is a single deduction at a fixed amount. Itemized deductions are popular among higher-income taxpayers who often have significant deductible expenses, such as state and local taxes paid, mortgage interest, and charitable contributions. for charitable gifts needs reform need look no further than yesterday’s Washington Post, which details a truly bizarre taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. deduction for the cost of big-game hunting trips if the mounted heads of the kill are donated to qualified charitable organizations:
Big-game hunters will find it far more difficult and less lucrative to donate their extra trophy mounts and claim charitable tax deductions under new tax rules being debated this week on the Senate floor…
The loophole Grassley said he is seeking to close allows big-game hunters to deduct some or all of the cost of their safaris if they later donate to a museum some of the trophy animals they kill and have mounted…
The Wyobraska Wildlife Museum in Gering, Neb., for instance, received hundreds of donated trophy mounts in recent years and kept most of them in trailers behind its modest facility before selling them at a taxidermy auction for a small percentage of the value claimed by donors…
The practice of donating hunting trophies has been broadly advertised within the big-game hunting community, with one appraiser from Chicago sending out brochures promoting ways to “Hunt for Free.” Hunters have also been encouraged to set up “museums” in their homes that would allow for large tax write-offs.
“The equivalent for non-hunters would be if someone bought a sweater in Paris, donated it to Goodwill, and took a tax deduction for the entire trip to Paris,” he said. (Full story here.)
If a tax deduction for the cost of hunting trips in exchange for the transfer of preserved animal heads to charities—who then auction them for cash—isn’t impossible to defend, I’m not sure what is. Unfortunately, the new rules proposed by Sen. Grassley would simply limit the deduction, not eliminate it altogether.
Upon closer examination, there are many other bizarre and indefensible provisions in the federal tax code subsidizing 501(c)(3) organizations that are questionably charitable. It’s unfortunate they’re receiving little attention in the current tax reform debate.
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