By Bruce Bartlett
The deduction for charitable contributions is among the oldest and most popular in the tax code. According to the Treasury, it reduces federal revenues by $54 billion, making it the fifth-largest tax expenditure. [T]he vast bulk of charitable gifts in dollar terms come from the wealthy, those making more than $200,000 a year. Whether or not it is curtailed to raise revenue for tax-rate reductions, there are growing concerns about the deduction and also about the mission and operations of some tax-exempt institutions. If the priorities of the wealthy were the same as those of the nonwealthy, this probably wouldn’t matter too much. But they are not. [T]hose with moderate incomes are far more likely to contribute to churches and other religious organizations, while the wealthy give relatively little of their total contributions to such groups. Education, health and arts organizations are much more significant recipients of contributions by the wealthy than by the nonwealthy. [link]
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