Browsing by Author "Hungerman, Daniel M."

Now showing 1 - 3 of 3
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    Identifying Tax Effects on Charitable Giving
    (12/5/2007) Wilhelm, Mark Ottoni; Hungerman, Daniel M.
    This paper estimates the effects of three federal tax acts—the Economic Growth and Tax Relief Reconciliation Act of 2001 (H.R. 1836), the Jobs and Growth Tax Relief Reconciliation Act of 2003 (H.R. 2), and the Working Families Tax Relief Act of 2004 (H.R. 1308)—on charitable giving, and offers four extensions relative to previous work. First, we use new data—the Center on Philanthropy Panel Study, the philanthropy module in the Panel Study of Income Dynamics—that permit the estimation of the effect of switches in itemization status on giving. This is important because switches permit a direct answer to the question: How much of an increase in charitable giving is caused by tax deductibility? Second, the new data permit the estimation of tax effects on charitable giving to secular charities as well as to religious organizations. This is important because the main policy question in the literature on taxes and giving is to evaluate “treasury efficiency”—whether the Treasury can cause more money to flow to charitable organizations by allowing deductibility of giving than by eliminating deductibility and sending the increased tax revenue directly to charitable organizations. By using secular giving, we can focus on the type of giving most relevant to this policy question. Third, the new data allow for improved methodological approaches over past studies. Fourth, we argue that the 2001, 2003, and 2004 federal tax acts were timed such that they provide a set of tax changes suitable for identifying permanent effects of taxes on giving. The estimates based on the analysis of families who switch itemization status suggest that secular giving is price elastic, implying that treasury efficiency holds. In contrast, estimates which impose the restrictions facing other datasets suggest a statistically insignificant price elasticity.
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    Impure Impact Giving: Theory and Evidence
    (National Bureau of Economic Research, 2018) Hungerman, Daniel M.; Ottoni-Wilhelm, Mark; Economics, School of Liberal Arts
    We present a new model of charitable giving where individuals regard out-of-pocket donations and the matches they induce as different. We show that match-price elasticities combine conventional price effects with the strength of warm glow, so that a match-price elasticity alone is insufficient to characterize preferences for giving. Match- and rebate-price elasticities will be different, but together they lead to new tests of underlying giving preferences. We estimate, for the first time, a match-price elasticity in a high-stakes setting together with a rebate elasticity induced by tax policy. The estimates reject extant models of giving but are consistent with the new theory.
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    Tax Incentives for Charitable Giving: New Findings from the TCJA
    (Indiana University Lilly Family School of Philanthropy, 2024-07-29) Han, Xiao; Hungerman, Daniel M.; Ottoni-Wilhelm, Mark
    The Tax Cuts and Jobs Act eliminated federal charitable giving incentives for roughly 20 percent of US income-tax payers. We study the impact of this on giving. Basic theory and our empirical results suggest heterogeneous effects for taxpayers with different amounts of itemizable expenses. Overall, the reform decreased charitable giving by about $20 billion annually. Using a new method to adjust estimates for retimed giving, we find evidence of moderate intertemporal shifts from pre-announcement of the law. The permanent price elasticity of giving estimates range from .6 for the average donor to over 2 for those predicted to be most responsive to the reform.