ENCOURAGING CHARITABLE GIVING: MATCHING GRANTS VERSUS REBATES F

We found that total contributions by taxpayers with very high incomes actually increased in nominal terms between 2017 and 2018.5 COULD THE FEDERAL GOVERNMENT SWITCH TO MATCHING GRANTS? Under the current tax system, the charitable giving subsidy rate is related to the tax rate on income: as noted, for an itemizer facing a tax rate t, the price of giving is 1–t. [...] To calculate that rate, we must first distinguish between the marginal tax rate of the average taxpayer and the marginal tax rate of the average dollar earned. [...] As a result, in 2020, the marginal tax rate of the average taxpayer was about 12 percent, but the marginal tax rate of the average dollar of taxable income was about 23 percent. [...] For example, the National Endowment for the Humanities will provide a dollar-for-dollar match of private contributions to many National Endowment for the Humanities sponsored projects.10 The Office of Refugee Resettlement provides funds matched to cash or in-kind contributions at the rate of two dollars for every private dollar.11 Agencies in the federal government will, in rare cases, match not j. [...] The views expressed are those of the authors and should not be attributed to the Urban-Brookings Tax Policy Center, the Urban Institute, the Brookings Institution, their trustees, or their funders.