Lawrence K: I do understand the appeal of a “tail-wind to virtue.” However, if that is what you want, the charitable deduction in its current form does a poor job. First of all, it is a tail-wind to virtue only for the rich, since most lower- and middle-income families do not itemize, even though many of them give generously. Second, empirically, it does little actually to stimulate giving in comparison to its cost in revenue. A limited tax credit available to givers of all income levels and more narrowly targeted to truly charitable causes would be both less expensive and a more effective tail-wind.

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Economist, Senior Fellow at Niskanen Center, Yale Ph.D. Interests include environment, health care policy, social safety net, economic freedom.

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