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Why The Buffett-Gates Giving Pledge Requires Limitation Of The Estate Tax Charitable Deduction, Edward A. Zelinsky
Why The Buffett-Gates Giving Pledge Requires Limitation Of The Estate Tax Charitable Deduction, Edward A. Zelinsky
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The Buffett-Gates Giving Pledge, under which wealthy individuals promise to leave a majority of their assets to charity, is an admirable effort to encourage philanthropy. However, the Pledge requires us to confront the paradox that the federal estate tax charitable deduction is unlimited while the federal income tax charitable deduction is capped. If a Giving Pledger leaves his wealth to charity, the federal fisc loses significant revenue since the Pledger thereby avoids federal estate taxation as charitable bequests are deductible without limit for federal estate tax purposes. Despite its laudable qualities, the Giving Pledge is a systematic (albeit inadvertent) threat …