NEWTITHING GROUP, SPRING 2004, THE GENEROSITY OF RICH AND POOR – Table 2. Footnotes

A. Tax Year: The full calendar tax-year, January 1st through December 31st.

B. Adjusted Gross Income Group: Adjusted gross income group as defined by the IRS for individual income tax returns.

C. Number of Filers: The number of individual income tax filers in each AGI Group for tax-year 2001 was provided by the IRS Statistics of Income Division, Publication 1304.

D. Average Adjusted Gross Income: The number of individual income tax filers in each AGI Group for tax-year 2001 was provided by the IRS Statistics of Income Division, Publication 1304.

E. Average Net Realized Gains Reported: The net realized gains reported in tax-year 2001 by average filers in each AGI group. From the IRS Statistics of Income Division, Publication 1304.

F. Average Actual Cash Gifts: The actual gift donated in tax-year 2001 by average filers in each AGI group. From the IRS Statistics of Income Division, Publication 1304.

G. Average Actual Asset Gifts: The actual gift donated in tax-year 2001 by average filers in each AGI group. From the IRS Statistics of Income Division, Publication 1304.

H. Average Avoidable Capital Gains Taxes: If they had replaced their cash donations with the long term appreciated assets that they sold, average tax filers could have avoided long term capital gains taxes. The estimated avoidable taxes become meaningful starting at $1,500 in capital gains taxes paid by average filers earning $1 million to $1.5 million in AGI, to $32,000 in taxes paid by average filers earning $10 million or more in AGI. Instead of paying these amounts in taxes due to gains reported to the IRS (footnote E.), such filers could have either kept these savings -- or donated them to charity. NewTithing Group’s Assumptions on avoidable capital gains tax are as follows: A. No more than one third of the total gains reported by average filers as net realized gains in yr-2001 to the IRS were long-term. B. If the donations made in cash were instead made in appreciated assets: 20% of the appreciated assets would be treated as long-term gains. The remaining 80% would be treated as the cost basis of the appreciated assets. C. The appreciated assets were securities. The maximum federal long term capital gains tax rate in 2001 for securities was 20% (in 2004 it was 15%). D. The maximum state long term capital gains rate for securities in 2001 was 8%. E. The higher potential savings for filers affected by the Alternative Minimum Tax (generally 28%) was not counted, which makes the estimate conservative: Those filers could have avoided even more taxes if they had donated appreciated assets to charity instead of cash. F. These estimates account for the tax deduction limit on contributions to public charities.