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Weird Facts About Our Tax Code
A recent article in Forbes magazine about the 2012 changes to federal tax laws (by a late acting Congress) put the complexity of the laws into some perspective. Here are a couple of fun questions based on that article.
Question 1: How many words in our current federal tax law?
a. 4X the number of ALL the words in ALL the Harry Potter books combined.
b. 7X Atlas Shrugged by Ayn Rand
c. 7X War and Peace by Leon Tolstoy
d. 11X Iliad by Homer
e. 3.3X In Search of Lost Time by Marcel Proust (longest novel)
f. All of the above
Scroll down for the answer.
But first, here's another one:
Question 2: How many changes has Congress made to the tax law in the last 10 years?
b. 17,000 +
c. 5,000 +
Answer to Question 1:
F. All of the above. There are approximately 4,000,000 words in our federal tax law.
Answer to Question 2:
C Not only is it lengthy, it continues to evolve. There have been more than 5000 adjustments to the law within the last 10 years.
So what aspects of the most recent changes to tax law impact charitable giving and the work we do?
One of the key changes that may affect your most wealthy donors, that you should have at least some awareness of, is the change in capital gains tax rates. As of January 1, 2013, there was a new long-term capital gains rate of 20% which applies to taxpayers who fall within the new 39.6% tax bracket.
You can read more about taxes and how they relate to our donors and charitable giving in the tax section of the Gift Planning Field Guide.