Testimony Before the Senate Finance Committee: 'Tax Reform Options: Incentives for Charitable Giving'

Abstract

The Congressional testimony provides a framework for thinking about the role of the charitable deduction in the federal income tax. As changes to the deduction are weighed by policymakers, it is important to consider: (1) the existing characteristics and policy tenets of the charitable deduction; (2) in practical terms, the allocation of the benefits of the charitable deduction; (3) in theoretical or policy terms, what the charitable deduction is for and whether the theory of the deduction is consistent with expectations; and (4) how existing proposals to change the deduction (including floors, caps, and credits) fit into the current law framework.

Keywords: charity, charitable deduction, floors, caps, credits, itemized deduction, tax expenditure, budget, finance committee

JEL Classification: D31, H20, H21, H23, H24, H29, H41, H49, H53, H60, H81, I00, I31, I38, K34