"The Impact of Taxes and Wasteful Government Spending on Giving" by Roman M. Sheremeta and Neslihan Uler
 

Document Type

Article

Publication Date

2016

Abstract

We examine the impact of taxes and wasteful government spending on charitable giving. In our model, the government collects a flat-rate tax on income net of donations and wastes part of the tax revenue before redistribution. The model provides theoretical predictions which we test in a framed field experiment. The results of the experiment show that the tax rate has a weak and insignificant effect on giving. The degree of waste, however, has a large, negative and significant effect on giving, with the relationship moderated by the curvature in the utility function.

Comments

Working Paper 16-07

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