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Charitable giving and the Tax Cuts and Jobs Act

AEI Economic Perspectives papers

Abstract

This paper investigates how the Tax Cuts and Jobs Act affects household charitable giving in the United States. We find that the law will reduce charitable giving by $17.2 billion (4.0 percent) in 2018 according to a static model and $16.3 billion assuming a modest boost to growth. Four-fifths of this decline is driven by an increase in the number of taxpayers who claim the standard deduction. We also investigate two policy options that could boost total giving above previous levels: an above-the-line deduction and a tax credit.

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Charitable Giving and the Tax Cuts and Jobs Act