What happens to charitable giving?
Charitable contributions depend on one factor more than any other: The health of the economy (not tax benefits). As a wide range of economists agree on the economic expansion the FairTax delivers, charitable contributions benefit also. For all of the money that pours into churches every Sunday and into a broad range of charities every day, only the 30 percent who itemize get any tax benefit. The other 70 percent have given and keep giving with no tax benefit whatsoever. The FairTax allows people to make charitable contributions out of pre-tax dollars. Thus, those generally less affluent taxpayers who do not itemize see their cost of charitable giving go down under the FairTax. Finally, the wealthy make decisions on charitable giving based on the cause. Once they have determined the cause is worthy, their contribution is structured to maximize the gift and minimize the tax. But the intention to give comes first; taxes simply determine the structure — rarely the amount — of the gift.
