Tax Prices and Charitable Giving: Projected Changes in Donations Under the 2017 TCJA

Jonathan Meer and Benjamin A. Priday

No 26452, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We estimate the tax price elasticity of charitable giving using newly-available data from the Panel Study of Income Dynamics spanning 2001-2017. We find that households that always itemize are less sensitive to changes in the tax treatment of donations than house-holds that switch itemizing status. We apply these results to the provisions of the Tax Cut and Jobs Act of 2017, taking into account the marginal propensity to donate from the increase in disposable income expected for most households, and predict significant reductions in charitable giving.

JEL-codes: D64 H24 H41 (search for similar items in EconPapers)
Date: 2019-11
New Economics Papers: this item is included in nep-pbe
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Published as Tax Prices and Charitable Giving: Projected Changes in Donations under the 2017 Tax Cuts and Jobs Act , Jonathan Meer, Benjamin A. Priday. in Tax Policy and the Economy, Volume 34 , Moffitt. 2020

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