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

48 Pages Posted: 16 Jul 2004 Last revised: 13 Jun 2021

See all articles by Charles T. Clotfelter

Charles T. Clotfelter

Duke University - Sanford School of Public Policy; Duke University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: March 1990

Abstract

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.

Suggested Citation

Clotfelter, Charles T., The Impact of Tax Reform on Charitable Giving: a 1989 Perspective (March 1990). NBER Working Paper No. w3273, Available at SSRN: https://ssrn.com/abstract=226702

Charles T. Clotfelter (Contact Author)

Duke University - Sanford School of Public Policy ( email )

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