PAUL E. KLOPSTEG 



giving is nearly nine times as great for the person with the 

 lowest taxable income as it is for his affluent friend. Simply 

 stated, under the present tax law, the incentive for the lower- 

 income groups to make gifts is strongly negative. On substan- 

 tially over one-half of the total number of returns with adjusted 

 gross incomes ranging between $5,000 and $50,000, deductions 

 are itemized. In this group, and in the relatively much smaller 

 number with higher incomes, we find the great majority of 

 persons with more than passing interest in higher education. 

 Their gift dollars cost them from 41 to 78 cents. In the middle- 

 income group, the annual income is so depleted by cost of living 

 and other obligations, including taxes, that relatively few dollars 

 remain. Competition for them, from both within the family 

 and outside, makes the intrinsic worth of the "surplus" dollar 

 very great as compared with that of the tax-paid dollar of the 

 high-income group. 



Recognition of this situation suggests the desirability of 

 an amendment to the internal revenue code, based on a prin- 

 ciple which is equitable to the taxpayer. This principle is that 

 the cost of giving should be no greater for those with small 

 incomes than for those whose incomes are large. A method has 

 been devised by which the cost of gifts for higher education is 

 equalized for all taxpayers. 



The desirability of amending the internal revenue code to 

 accomplish such equalization of cost of giving has been ex- 

 pressed in various publications by individuals and groups. For 

 example, the President's Committee on Education beyond the 

 High School in its final report made the recommendation: 



That the Federal revenue laws be revised in ways which will even 

 more strongly encourage larger contributions from more individ- 

 uals to educational institutions. Partial credits against taxes are a 

 way to equalize the advantage of such giving between larger and 

 smaller incomes. 



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