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Tax Incentives for Charitable Giving: New Findings from the TCJA

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Listed:
  • Xiao Han
  • Daniel M. Hungerman
  • Mark Ottoni-Wilhelm

Abstract

The Tax Cuts and Jobs Act eliminated federal charitable giving incentives for roughly 20 percent of US income-tax payers. We study the impact of this on giving. Basic theory and our empirical results suggest heterogeneous effects for taxpayers with different amounts of itemizable expenses. Overall, the reform decreased charitable giving by about $20 billion annually. Using a new method to adjust estimates for retimed giving, we find evidence of moderate intertemporal shifts from pre-announcement of the law. The permanent price elasticity of giving estimates range from .6 for the average donor to over 2 for those predicted to be most responsive to the reform.

Suggested Citation

  • Xiao Han & Daniel M. Hungerman & Mark Ottoni-Wilhelm, 2024. "Tax Incentives for Charitable Giving: New Findings from the TCJA," NBER Working Papers 32737, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:32737
    Note: PE
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    More about this item

    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship

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