Although the majority of PEOPLE that give money to charities do so from after-tax income because they don't itemize deductions, I suspect the larger contributions ARE from untaxed income because the larger contributors do itemize.Just curious, did you ever hear from Karen Walby on this issue?
If it isn't worth itemizing your deductions, your marginal tax rate is unlikely to be over 23%, even including SS/M. So this crowd is not going to be able to donate 30% more than they used to.
The itemizers are already donating untaxed dollars, so they see no benefit on the donation side.
If the charity then had to go and pay 30% more for all their operating expenses, there is no way they would come out ahead. Yet the FairTax is touted -- in whitepapers, FAQs, and even the presentation they gave to the Tax Reform Panel last year -- as BETTER for charities than the current system.
It just doesn't add up to your interpretation. I'd be likelier to believe you are misinterpreting the links to the NIPA data -- or even that Karen Walby made a mistake in including that consumption from the base. I posted a message to her last night and provided a link to your post here. Hopefully she'll respond.
Karen Walby did not respond. But I posted thru a moderated Yahoo group, and I do not see my question there either. So either the moderator didn't approve of my post, or it got lost in the shuffle. It doesn't speak well for the moderator in either case.
I've sent a regular e-mail thru the fairtax.org contact page. Maybe I'll get a response that way.