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On the Desirability of Taxing Charitable Contributions

Author

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  • Tomer Blumkin
  • Efraim Sadka

Abstract

We develop a model that allows for public goods and status signaling through charitable contributions. This model provides a unified framework in which contributions are driven both by altruism and status signaling. We use this setup to re-examine the conventional practice of rendering a favorable tax treatment to charitable contributions.

Suggested Citation

  • Tomer Blumkin & Efraim Sadka, 2007. "On the Desirability of Taxing Charitable Contributions," CESifo Working Paper Series 1900, CESifo.
    • Handle: RePEc:ces:ceswps:_1900
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    References listed on IDEAS

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    6. Harbaugh, William T, 1998. "The Prestige Motive for Making Charitable Transfers," American Economic Review, American Economic Association, vol. 88(2), pages 277-282, May.
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    Cited by:

    1. Polborn Mattias K, 2008. "Competing for Recognition through Public Good Provision," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 8(1), pages 1-25, September.
    2. Aronsson, Thomas & Johansson-Stenman, Olof & Wendner, Ronald, 2016. "Redistribution through Charity and Optimal Taxation when People are Concerned with Social Status," MPRA Paper 68731, University Library of Munich, Germany.
    3. Blumkin, Tomer & Sadka, Efraim, 2007. "A case for taxing charitable donations," Journal of Public Economics, Elsevier, vol. 91(7-8), pages 1555-1564, August.
    4. David A. Weisbach, 2008. "What Does Happiness Research Tell Us About Taxation?," The Journal of Legal Studies, University of Chicago Press, vol. 37(S2), pages 293-324, June.

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    More about this item

    Keywords

    optimal taxation; re-distribution; charitable contributions; inequality;
    All these keywords.

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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