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The Economists' VoiceTop Economists Take On Today's Problems$
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Joseph Stiglitz, Aaron Edlin, and J. Bradford DeLong

Print publication date: 2011

Print ISBN-13: 9780231143653

Published to Columbia Scholarship Online: November 2015

DOI: 10.7312/columbia/9780231143653.001.0001

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The Choose-Your-Charity Tax

The Choose-Your-Charity Tax

A Way to Incentivize Greater Giving

Chapter:
(p.203) Chapter 23 The Choose-Your-Charity Tax
Source:
The Economists' Voice
Author(s):

Aaron S. Edlin

Publisher:
Columbia University Press
DOI:10.7312/columbia/9780231143653.003.0023

Many people do not give as much as they can afford to charity due to the seeming irrelevance of a single contribution. The problem with good causes is that the very thing that makes a charity a good cause is the enormity of the problem it is fighting. Yet because the problem is so vast, it appears that one's gift is merely a drop in the bucket. This chapter proposes a strategy to deal with this problem. It involves expanding upon the idea and power of a matching grant: the Choose-Your-Charity Tax. Under the current tax system, contributions to eligible charities are tax-deductible. The Choose-Your-Charity Tax proposal would replace that rule—and go much further. The new rule would be this: People would get a tax credit of $1 for each dollar they spend, up to a certain limit, on a charitable contribution. To make the plan revenue-neutral for the government, that limit would be equivalent to a tax increase.

Keywords:   charities, charitable giving, charitable donations, tax credit, grants

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