Andrew T. Hayashi and Justin Hopkins: The Charitable Tax Deduction and Civic Engagement (July 22, 2021)

Andrew T. Hayashi and Justin Hopkins, of The University of Virginia School of Law and The University of Virginia respectively, have made available for download their article, The Charitable Tax Deduction and Civic Engagement, published in the Virginia Public Law and Legal Theory Research Paper. The abstract is as follows:

In an era characterized by inequalities of income and influence, political polarization, and the segregation of social spaces, the income tax deduction for charitable contributions would appear to abet some of our worst social ills because it allows wealthy individuals to steer public funds to their preferred charities. But we argue that now is the time to expand and refocus—not abolish—the tax subsidy for charitable giving. Previous assessments of the charitable deduction have focused on how it helps charities but ignored an essential benefit of giving: its effect on the donor. We show that the charitable deduction increases volunteerism along with financial giving, and we report new evidence that volunteerism is associated with broader civic and political engagement, including engagement with people of different cultures, races, and ethnicities. Since people tend to undervalue the social and relational goods that flow from civic participation, the charitable deduction is a helpful corrective. We also report evidence that civic engagement is unequally distributed and propose a new refundable tax credit that turns low- and middleincome households from clients of charities to donors, which can both empower them and help remedy inequalities in civic and political participation.

To see the full article, click: The Charitable Tax Deduction and Civic Engagement by Andrew T. Hayashi and Justin Hopkins

 Posted by Josh Saret, Associate Editor, Wealth Strategies Journal.

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