Rationale and Changing the Charitable Deduction
Catholic University of America (CUA) - Columbus School of Law
Tax Notes, Vol. 138, No. 1453, 2013
CUA Columbus School of Law Legal Studies Research Paper No. 2013-9
There are two principal rationales for the charitable deduction. Depending upon choice of rationale, some tax reform changes are suggested and others are not. A base measurement rationale suggests eliminating the deduction for unrealized appreciation, keeping the benefit as a deduction and not a credit, not adopting caps or a nonitemizer deduction, and protecting the tax base by narrowing the class of organizations eligible to receive deductible contributions. A subsidy rationale, depending upon which strand is emphasized, might favor a more equitable tax benefit in the form of a credit or through caps or a nonitemizer deduction, and could lead to preferring some organizations over others. Both rationales are consistent with placing a floor under the deduction, and narrowing its scope. Present law presents a confusing mix of policies and priorities. Tax reform presents an opportunity to reconsider the role of the charitable deduction in the tax system and to act accordingly.
Number of Pages in PDF File: 8
Keywords: charitable deduction, tax reform, subsidy theory
JEL Classification: H2, H20, H24, H4, H5, I00, I10, I20, I30, L3Accepted Paper Series
Date posted: November 29, 2013
© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo6 in 0.360 seconds