Subsidizing Charitable Contributions With a Match Instead of a Deduction: What Happens to Donations and Compliance?

Marsha Blumenthal, Laura Kalambokidis and Alex Turk

National Tax Journal, 2012, vol. 65, issue 1, 91-116

Abstract: The current U.S. income tax system subsidizes contributions to charities by allowing individual taxpayers to itemize and deduct contributions from taxable income. In effect, taxpayers can receive a rebate from the government based on the contributions they make to charitable organizations. Under one alternative system, the government matches the contributions of individual taxpayers at some rate between 0 percent and 100 percent. This paper explores the tax policy and administrative implications of matching rather than rebating contributions in a tax system with voluntary reporting. We conduct a novel experiment to examine both charitable giving and compliance behavior under the two regimes.

Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:ntj:journl:v:65:y:2012:i:1:p:91-116

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