Wednesday, January 30, 2008
Proposed Campaign Contribution Limits and Tax Law
Will the proposed campaign contribution limit proposed by J. Michael Schweder work? No. He apparently did not consider the tax law. According to Internal Revenue Service (IRS) Code Section 2503(b) in 2007, an individual can gift $12,000 or less to anyone and no gift tax filings need to be completed. Therefore, in order to circumvent any changes in campaign contribution limits, any individual could gift privately to the candidate any dollar amount $12,000 or less and the candidate could contribute to his or her own campaign. The aforementioned discussion is considered the "gift tax exclusion" regulations. In addition, the gift tax exclusion is adjusted every year for inflation. In 2006 the gift tax exclusion amount was $11,000.