Retiring the Public Debt

[rowyn]

I knew that you could donate to the federal government, but I just found out today that you can make a donation to reduce the public debt. It’s even tax-deductible! Which may seem nonsensical (if I wanted to give more money to the federal government, why would I turn around and give them less money?), but I can see how one might feel that reducing the debt is a more worthy goal than funding the federal government in general. They even take credit cards. (Slogan: Increase Your Own Debt to Pay Off Ours! … maybe not.)

Anyway, I thought it was neat.

Comments

[shockwave77598.livejournal.com]

As I recall, it's only half deduction and is considered Charity. If you had a 1000 dollar tax debt, giving 1000 to the debt relief would knock it down by 500 or so. So it's a poor way of lowering your taxes.

Worse than that, actually

[rowyn]

The tax code treats it like a charity. Meaning, if you itemize your deductions, you can deduct it and not have to pay additional taxes on the money you gave to pay down the debt. For most people, that works out to getting 15%-35% of whatever amount you donated taken off your tax bill.

As with a charity, you'd mostly be doing it because you think it's a good idea.