What is an IDA? It’s a savings plan for low income people. The Oregon legislature defines what kind of goals people can save toward, and it also sets a limit on how much money can be raised from donors. Contributions come from Oregonians like you and me. Low-income Oregonians enroll in the program and start saving to buy a home, or start a small business, or further their education, or other goals. Once they reach their financial goal, their savings are matched three to one, up to a maximum of $3,000. Along the way, they go to workshops to build financial savvy.

How many peoples’ lives are better because of this program? Cynthia Winters at The Neighborhood Partnership Fund, the nonprofit that oversees the program, informs me that there are currently over 1,100 low-income Oregonians enrolled. Last year, over 500 Oregonians completed the program. This year, even more will be able to enroll.

Then there’s the donors. Last year, this group of Oregonians at the other end of the economic spectrum from the participants also benefited from the program through the tax credit for donations. Here’s how the credit works:

The IDA Tax Credit begins with your contribution to the Neighborhood Partnership Fund. 75% of your contribution becomes a credit on your State of Oregon income tax return. For example, if you as an individual made a donation of $1000 to the IDA Initiative, you would then be qualified for a tax credit of 75%, or $750 against your state income taxes. The tax credit reduces the state taxes that you would otherwise pay. (Source)

I was surprised to learn a couple things when the 2007 report to donors came out a few weeks back. One, that only 333 people contributed $6 million. Two, that the average contribution was over $17,000. I contributed, but given the amounts raised from so few people, I imagine that my tiny contribution actually skewed all the data downwards! Regardless, I benefited from lowering my tax liability and from feeling like, for once, I was certain that the taxes I paid were doing something good.

So here’s a challenge to my readers, family, and friends in Oregon: consider making a donation this year (note: link is to a .pdf). Right now, there are over $7 million in tax credits remaining. And while it’s great that a handful of wealthy Oregonians are getting tax breaks in a way that’s pretty noble, the tax credit could also benefit a lot of “average” Oregonians out there…you know, the middle-income ones who complain about how their taxes are spent. I’d love to see that thousands of Oregonians contributed to this program in 2008 when the next report comes out, not just for the tax breaks, but for a greater sense of community and being in this together.

^{*I am not an accountant or tax specialist, and this is not financial advice. See someone who is qualified to help you that way if you want to know about how this might affect your particular situation.}

• The nation’s 34 million immigrants collectively pay more in taxes than they consume in public services and benefits, according to a National Research Council study. Washington Post, April 15, 2006
• Undocumented immigrants annually pay an estimated $7 billion more than they take out into Social Security, and $1.5 billion more into Medicare. (New York Times, April 15, 2005.) A study by the National Academy of Sciences also found that tax payments generated by immigrants outweighed any costs associated with services used by immigrants.
• All consumers, including the undocumented, pay state sales and consumption taxes when making purchases. Additionally, whether they own their own home or taxes are passed through to rents, everyone pays the same real estate taxes. The majority of state and local costs of schooling and other services are funded by these taxes.
• The Social Security Administration has estimated that three quarters of undocumented immigrants pay payroll taxes, and they annually contribute $8.5 billion in Social Security funds that they will be unable to claim.
• The Internal Revenue Service issues ‘Taxpayer Identification Numbers’ (ITIN) to allow undocumented workers to pay income taxes. Since 1996, 9.2 million of these numbers have been assigned. In 2005 alone, 1.2 million people paid taxes using this number. (Los Angeles Times, April 16, 2006.) At congressional hearings in July 2006, the commissioner of the IRS testified that between 1996 and 2003, undocumented immigrants paid almost $50 billion in federal taxes.
• According to the National Association of Hispanic Real Estate Professionals, ITINs and conventional mortgages taken out by undocumented workers could be worth as much as $60 billion over the next five years; that is, immigrants also pay property taxes. Business Week, July 13, 2005

Food for thought.