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How has charitable giving changed the US in the wake of the Great Recession, and what are the ramifications for future tax policy? On Tuesday afternoon, AEI's Arthur Brooks presented his econometric analysis of how the American economy has changed over the past five years, highlighting that Americans give more than $300 billion per year, and this giving is unusually insensitive to fluctuations in a donor's income but is unusually sensitive to changes in the tax incentives that donors face. While his research quantifies the short-term damage that limiting the charitable deduction would deal to nonprofits, he emphasized that charities would benefit along with the rest of America from the economic growth that a flatter, fairer tax code would ignite across the board.
In a discussion following Brooks's keynote address, Scott Hodge of the Tax Foundation asserted that we should focus on tax policies that lead to long-run growth, in part because growth will ultimately lead to more giving. Howard Husock of the Manhattan Institute complemented Brooks's work by sharing new insights on how capping deductions would impact regions differently. Rob McClelland of the Congressional Budget Office discussed Brooks's research methodology, suggesting several econometric techniques that might confirm the rigor and robustness of the results. AEI's own Alex Brill closed the discussion by echoing McClelland's curiosity as to whether the irregular relationships between income, tax incentives, and charitable giving that Brooks identified were temporary or permanent.
--Marja Kunz and Andrew Quinn
Nothing encompasses the values of freedom, opportunity, and enterprise better than the great American tradition of philanthropy. AEI shares these values, and its new Philanthropic Freedom Project is dedicated to studying philanthropy and the policies that affect it.
At the project's inaugural public event, AEI President Arthur Brooks will present his new research on how charitable giving has changed in the United States in the wake of the Great Recession and how those changes have serious ramifications for future tax policy. He will be joined by panelists from AEI, the Manhattan Institute, the Tax Foundation, and the Congressional Budget Office who will explore the arguments for and against keeping the charitable deduction in light of the recession.
If you are unable to attend, we welcome you to watch the event live on this page. Full video will be posted within 24 hours.
Arthur C. Brooks, AEI
Alex Brill, AEI
Scott Hodge, Tax Foundation
Howard Husock, Manhattan Institute
Robert McClelland, Congressional Budget Office
Arthur C. Brooks, AEI
For more information, please contact Andrew Quinn at [email protected], 202.862.7162.
For media inquiries, please contact [email protected], 202.862.5829.
Alex Brill is a research fellow at AEI, where he studies the impact of tax policy on the US economy as well as the fiscal, economic, and political consequences of tax, budget, health care, retirement security, and trade policies. He also works on health care reform, pharmaceutical spending and drug innovation, and unemployment insurance reform. Brill is the author of a pro-growth proposal to reduce the corporate tax rate to 25 percent and “The Real Tax Burden: More than Dollars and Cents” (AEI Press, 2011), coauthored with Alan D. Viard. He has testified numerous times before Congress on tax policy, labor markets and unemployment insurance, Social Security reform, fiscal stimulus, the manufacturing sector, and biologic drug competition. Before joining AEI, Brill served as the policy director and chief economist of the House Ways and Means Committee. Previously, he served on the staff of the White House Council of Economic Advisers. He has also served on the staff of the president's fiscal commission and the Republican platform committee.
Arthur C. Brooks is the president of AEI. Until January 1, 2009, he was the Louis A. Bantle Professor of Business and Government Policy at Syracuse University. He is the author of 10 books and many articles on topics ranging from the economics of the arts to applied mathematics. His most recent books include “The Road to Freedom: How to Win the Fight for Free Enterprise” (Basic Books, 2012), “The Battle: How the Fight between Free Enterprise and Big Government Will Shape America's Future” (Basic Books, May 2010), “Gross National Happiness” (Basic Books, 2008), “Social Entrepreneurship” (Prentice-Hall, 2008), and “Who Really Cares” (Basic Books, 2006). Before pursuing his work in public policy, Brooks spent 12 years as a professional French hornist with the City Orchestra of Barcelona and other ensembles.
Scott Hodge is president of the Tax Foundation and is recognized as one of Washington's leading experts on tax policy, the federal budget, and government spending. He was the creative force behind the Tax Foundation’s Taxes and Growth Dynamic Tax Modeling project and State Business Tax Climate Index, two programs that are changing the terms of the tax debate at the federal and state level. During the 1990s, Hodge led the campaign to include the $500 per-child credit and capital gains tax cuts in the Contract with America. These tax cuts were the eventual centerpieces of the 1997 tax bill and the George W. Bush tax cuts in 2001 and 2003. Hodge has written and edited three books on the federal budget and on streamlining the government, and has authored more than 100 studies on tax policy and government spending. He has also authored dozens of editorials and opinion pieces for publications such as The Wall Street Journal, The Washington Post, USA Today, the New York Post, and The Washington Times. Hodge has conducted more than 600 radio and television interviews on “NBC Nightly News,” CBS nightly news, CNN, Fox’s “Hardball with Chris Mathews,” and C-SPAN, among other programs or networks. In addition, he has contributed to stories on wasteful spending aired by ABC's "Prime-Time Live" and "20/20," and on NBC's "Fleecing of America." Hodge began his career in Chicago, where he helped found the Heartland Institute in 1984. Before joining the Tax Foundation, he was director of tax and budget policy at Citizens for a Sound Economy. He also spent 10 years at the Heritage Foundation, including 8 years as Heritage’s Grover Hermann Fellow in Federal Budgetary Affairs.
Howard Husock is vice president for policy research at the Manhattan Institute, where he is also director of its Social Entrepreneurship Initiative. He is the author of the Philanthropy and Society blog on Forbes.com and is a City Journal contributing editor. From 1987 through 2006, Husock served as director of case studies in public policy and management at Harvard University's Kennedy School of Government, where he was also a fellow at the Hauser Center on Nonprofit Organizations. His publications on the nonprofit sector have appeared in The Wall Street Journal, National Affairs, Society Magazine, The Chronicle of Philanthropy, The Public Interest, and Townhall.com. In addition, Husock has written widely on housing and urban policy, including in his book “The Trillion-Dollar Housing Mistake: The Failure of American Housing Policy” (Ivan R. Dee, 2003) and his monograph “Repairing the Ladder: Toward a New Housing Policy Paradigm” (Reason Foundation, 1996). His work has also appeared in the Journal of Policy Analysis and Management, Philanthropy, and The Wilson Quarterly. Husock is a former broadcast journalist and documentary filmmaker whose work at WGBH-TV in Boston won three Emmy awards.
Robert McClelland is currently a senior analyst at the Congressional Budget Office. Previously he was the chief of the price index research division at the Bureau of Labor Statistics. He has published in journals such as the American Economic Review, the Review of Economics and Statistics, and the Journal of Applied Econometrics. He has taught econometrics at Johns Hopkins University since 1999, receiving the Applied Economics’ Excellence in Teaching award in 2006.