Working Paper

On the Desirability of Taxing Charitable Contributions

Tomer Blumkin, Efraim Sadka
CESifo, Munich, 2007

CESifo Working Paper No. 1900

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.

CESifo Category
Public Finance
Keywords: optimal taxation, re-distribution, charitable contributions, inequality
JEL Classification: D600,H200