On the Desirability of Taxing Charitable Contributions
35 Pages Posted: 8 Feb 2007
Date Written: January 2007
We develop a model that allows for public goods and status signaling through charitable contributions. This model provides a unified framework in which contributions are driven both by altruism and status signaling. We use this setup to re-examine the conventional practice of rendering a favorable tax treatment to charitable contributions.
Keywords: optimal taxation, re-distribution, charitable contributions, inequality
JEL Classification: H2, D6
Suggested Citation: Suggested Citation