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Question 7 Would Encourage Giving

By Michael J. Ring


Question 7, the third of three tax policy questions on the Massachusetts state ballot, would allow Bay State taxpayers to deduct charitable contributions from their personal income taxes.

If Question 7 passes, a Massachusetts taxpayer would be allowed to deduct an amount equal to his charitable contributions from his taxable income. The deduction may be taken for any contribution that is considered a charitable contribution under federal tax policy. Question 7 would also allow a state taxpayer to deduct charitable contributions regardless of whether the taxpayer itemized contributions on his federal tax return. The provisions of Question 7 would become effective on January 1, 2001.

The vote on Question 7 is largely irrelevant because, earlier this year, lawmakers passed an income tax deduction for charitable giving. But because the deduction was passed after the final certification of referenda to appear on the ballot, Question 7 remains before Massachusetts voters. A “yes” vote on Question 7 therefore serves as more of a ratification of the action taken by legislators this summer rather than a change in policy.

Proponents of the tax deduction argue that passage of Question 7 will increase the amount of charitable donations in Massachusetts. Before the General Court passed a deduction, Massachusetts was only one of eight states that did not include such a provision in its tax code. Supporters of Question 7 cite this as one of the reasons that Bay State citizens give much less to charity than do residents of other states. The Catalogue of Philanthropy placed the Commonwealth last among the 50 states in per capita charitable contributions this year.

The Committee to Encourage Charitable Giving, which backs Question 7, believes that up to $220 million per year in contributions may be generated as a result of the tax policy change.

There is no organized opposition to Question 7. State Sen. Michael Morrissey (D-Quincy) authored an opposing statement in the official state voter’s guide, in which he said that Question 7 could create tax loopholes that would allow wealthy donors to set up foundations, receive large tax writeoffs, and then use foundation funds to pay personal expenses.