The Charitable Deduction as a Tax Expenditure: What it Buys and What to Do About It (Part 2)

In the first part of this post, I argued that the charitable deduction is popular because people perceive it as a reduction in taxes that encourages charitable giving, but that perception rest on false premises. The charitable deduction is better viewed as a tax expenditure than as a tax reduction; surprisingly little of it goes to genuinely charitable purposes; and the degree to which it stimulates giving is often exaggerated. This second part of the post extends the critique and examines the pros and cons of possible reforms. >>>Read more