NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Impact of Tax Reform on Charitable Giving: A 1989 Perspective

Charles T. Clotfelter

NBER Working Paper No. 3273
Issued in March 1990
NBER Program(s):   PE

The purpose of this paper is to examine the predicted effects of tax reform in the 1980s (the tax acts of 1981 and 1986) on charitable contributions by individuals and to compare them to the actual and apparent effects, viewed from the perspective of 1989. The paper discusses what the economic models can and cannot be expected to do. Then, using published data from tax returns, the paper compares actual and predicted changes in giving as a result of both of the major tax reform acts. The paper concludes that the changes in contributions are quite consistent with the economic model of giving. As a result of these tax changes, average giving in high income classes declined. These results imply that tax policy should continue to be considered one important determinant of the level of individual charitable contributions.

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Document Object Identifier (DOI): 10.3386/w3273

Published: Do Taxes Matter?, Slemrod, Joel, ed., Cambridge: MIT Press, 1990.

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