Tax Prices and Charitable Giving: Projected Changes in Donations Under the 2017 TCJA
NBER Working Paper No. 26452
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 house-holds 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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Document Object Identifier (DOI): 10.3386/w26452
Forthcoming: Tax Prices and Charitable Giving: Projected Changes in Donations under the 2017 Tax Cuts and Jobs Act, Jonathan Meer, Benjamin A. Priday. in Tax Policy and the Economy, Volume 34, Moffitt. 2020