The Effects of Federal Estate Tax Policy on Charitable Contributions: Technical Paper 2001-2

Tax policy encourages charitable contributions during an individual’s life through both the personal income tax and the estate tax. The effect of the income tax on contributions is well known. Because annual charitable contributions reduce the size of an estate, and hence the likely estate tax burden, the estate tax should also affect contributions. Recently, Auten and Joulfaian (1996) studied that issue using the tobit method on 1982 Statistics of Income data and found that the estate tax significantly increases charitable contributions. In this study, we estimate a similar model and find