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Tax Prices and Charitable Giving: Projected Changes in Donations under the 2017 TCJA

Jonathan Meer, Benjamin A. Priday


This chapter is a preliminary draft unless otherwise noted. It may not have been subjected to the formal review process of the NBER. This page will be updated as the chapter is revised.

Chapter in forthcoming NBER book Tax Policy and the Economy, Volume 34, Robert Moffitt, editor
Conference held September 26, 2019
Forthcoming from University of Chicago Press
in The Tax Policy and the Economy Series

We estimate the tax price elasticity of charitable giving using newly available data from the Panel Study of Income Dynamics spanning 2001-2017. We find that households that always itemize are less sensitive to changes in the tax treatment of donations than households that switch itemizing status. We apply these results to the provisions of the Tax Cut and Jobs Act of 2017, taking into account the marginal propensity to donate from the increase in disposable income expected for most households, and predict significant reductions in charitable giving.

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This chapter first appeared as NBER working paper w26452, Tax Prices and Charitable Giving: Projected Changes in Donations Under the 2017 TCJA, Jonathan Meer, Benjamin A. Priday
 
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