Options for Changing the Tax Treatment of Charitable Giving

May 24, 2011

The deductibility of charitable donations has been a feature of the U.S. individual income tax almost as long as the modern income tax has been in existence. Notwithstanding the long duration of that deduction, concerns about its cost, equity, and efficiency have prompted many proposals to change the tax treatment of charitable contributions.

At the request of the former Chairman of the House Committee on the Budget, CBO has examined patterns of individual charitable giving and analyzed how options for changing the tax treatment of such giving might affect the overall level of donations, the costs to the federal government, and the distribution of tax benefits by income group. In keeping with CBO’s mandate to provide objective, impartial analysis, this study makes no recommendations.