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ERIC Number: ED172679
Record Type: RIE
Publication Date: 1979-Jun
Pages: 10
Abstractor: N/A
Reference Count: 0
ISBN: N/A
ISSN: N/A
The Case for the Charitable Deduction: A Deduction, Not a Credit. A Guide to Tax Policy and Higher Education. Tax Studies Paper No. 3.
Council for Advancement and Support of Education, Washington, DC.; National Association of Independent Colleges and Universities, Washington, DC. National Inst. of Independent Colleges and Universities.; American Council on Education, Washington, DC.; Association of Governing Boards of Universities and Colleges, Washington, DC.
Reasons for continuing to allow the charitable deduction for income tax purposes rather than changing to a tax credit equal to 30 percent of a person's charitable donations are presented. It is projected that support for certain charities, primarily colleges and universities, would decline after implementation of a tax credit system. The current financial crisis in higher education and the role of voluntary support to institutions are discussed. Theoretical arguments against substituting a tax credit for charitable deduction are offered. The view of charitable deduction as a tax subsidy is contested, and the tax credit is viewed as less equitable than the deduction. It is proposed that a tax credit substitution would substantially reduce giving by high income individuals to make gifts. A tax credit for charitable contributions would increase the disposable income of the wealthy, decrease the income of middle- and lower-income individuals, and result in a less progressive distribution of income than with a charitable deduction. It is concluded that the proposal to substitute a tax credit for the charitable deduction is as a matter of tax theory questionable, is as a matter of tax policy less equitable than the deduction, and is as a practical matter unacceptable. (SW)
Office of Research, National Institute of Independent Colleges and Universities, 1717 Massachusetts Avenue, N.W., No. 503, Washington, DC 20036 ($.75)
Publication Type: Opinion Papers
Education Level: N/A
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: Council for Advancement and Support of Education, Washington, DC.; National Association of Independent Colleges and Universities, Washington, DC. National Inst. of Independent Colleges and Universities.; American Council on Education, Washington, DC.; Association of Governing Boards of Universities and Colleges, Washington, DC.
Identifiers: N/A