Who is Being Subsidized by the Charitable Tax Deduction?
A recent study by the Tax Foundation (link is to the press release, but provides access to the entire study) argues that the charitable tax deduction is both “highly regressive and subsidizes many organizations that are questionably charitable.” Specifically, the report notes that “few charities now subsidized by the charitable deduction provide services that wouldn’t otherwise be supplied in the marketplace without a tax subsidy.” According to the Tax Foundation’s economist who performed the study, “Gifts to traditional charities like scientific research and civil rights groups are a small part of total giving . . . (and furthermore) Many charities are similar to for-profit companies, selling private goods and services rather than conducting traditional charitable work . . . It’s hard to justify tax subsidies for them.” The press release notes: “The President’s Advisory Panel on Federal Tax Reform recently recommended expanding the charitable deduction in various ways. However, the st
