The Most Generous Nation in the World? A Critical Analysis of the Charitable Contribution Deduction in the United States' Internal Revenue Code

Abstract

Despite its cost, people often support the charitable contribution deduction by pointing to the oft-quoted statement, "America is the most generous nation on Earth," and justify philanthropy on the belief that it is redistributive, resulting "in the lessening of inequality between rich and poor, either through direct transfers from the rich to the poor or through efforts to improve structural conditions so that the poor will no longer need to rely on charity for basic sustenance." While Americans do give the most, many do not realize that what counts as giving to charity can include donations to religious organizations, elite private schools, and art museums. If our goal for charity is to promote equality with the maximum possible redistribution to those whose needs might otherwise go unmet, then the charitable contribution deduction fails to achieve this goal. [From Introduction]