). The full text of the letter will be reprinted in John A. Edie & Jane C. Nober, Beyond Our Borders: A Guide to Making Grants Outside the U.S. (3d ed., forthcoming 2002).
152 See text accompanying notes Error: Reference source not found-Error: Reference source not found, supra.
153 Rev. Rul. 67-149, 1967-2 C.B. 133.
154 Rev. Rul. 68-489, 1968-2 C.B. 210. See James F. Bloom, Edward D. Luft & John F. Reilly, Foreign Activities of Domestic Charities and Foreign Charities, Exempt Organizations Continuing Professional Education Technical Instruction Program for Fiscal Year 1992 220, 233 (1991)
155 I.R.C. §§ 2055(a ), 2522(a). In addition, although there is no explicit charitable deduction provision in the Generation Skipping Transfer rules, charities are generally “assigned to the transferor’s generation.” I.R.C. §§ 2651(e)(3)(A) and (B). The statutory chain is a bit tedious, but the result is fairly clear: transfers to charities do not trigger the tax. See I.R.C. §§ 2601, 2611(a), 2612, 2613(a), and 2651(e)(3).
156 They are beyond the scope of this chapter to explore. Some are cataloged at Harvey P. Dale, Foreign Charities, 48 Tax Law. 655, 670 n. 75 (1995).
157 In the case of the estate tax, the deduction cannot exceed the entire gross estate. I.R.C. § 2055(d). In the case of the gift tax, the deduction is “allowed only to the extent that the gifts therein specified are included in the amount of gifts against which such deductions are applied.” I.R.C. § 2524; Treas. Reg. §§ 25.2524-1, 25.2522(a)-1(c).
158 See text accompanying notes Error: Reference source not found-Error: Reference source not found, supra.
159 See text accompanying notes Error: Reference source not found-Error: Reference source not found, supra.
160 These special rules, under I.R.C. §§ 170(f)(8), 6115, and 6714, are discussed in the text accompanying notes Error: Reference source not found-Error: Reference source not found, supra.
168 Economic Growth and Tax Relief Reconciliation Act of 2001, § 511, Pub. L. No. 107-16, 115 Stat. 38, 70-71.
169 Economic Growth and Tax Relief Reconciliation Act of 2001, § 501, Pub. L. No. 107-16, 115 Stat. 38, 69.
170 Id., § 501(d).
171 Economic Growth and Tax Relief Reconciliation Act of 2001, § 901(a)(2), Pub. L. No. 107-16, 115 Stat. 38, 150.
172 See, e.g., Jonathan G. Blattmachr & Lauren Y. Detzel, Estate Planning Changes in the 2001 Tax Act — More Than You Can Count, 95 J. Tax'n 74 (2001); Jeffrey K. Eisen, Estate Planning Under 2001 Tax Act Presents New Challenges, 28 Est. Plan. 515 (2001); Charles F. Newlin & Andrea C. Chomakos, The 2001 Tax Act: Uncharted Waters for Estate Planners, 15 Prob. & Prop. 32 (2001); Roby B. Sawyers, Post EGTRRA Analysis and Planning, 32 Tax Adviser 822 (2001).
173 Henry Simons, Personal Income Taxation 50 (1938).
174 The leading articulation of this view is William D. Andrews, Personal Deductions in an Ideal Income Tax, 86 Harv. L. Rev. 309 (1972). See also John K. McNulty, Public Policy and Private Charity: A Tax Policy Perspective, 3 Va. Tax Rev. 229 (1984); Peter J. Wiedenbeck, Charitable Contributions: A Policy Perspective, 50 Mo. L. Rev. 85 (1985); Mark P. Gergen, The Case for a Charitable Contributions Deduction, 74 Va. L. Rev. 1393 (1988).
175 As Professor Andrews puts it, “Whatever its origin, the fair market value rule must now be viewed as a subsidy or artificial inducement, above and beyond mere tax exemption, for philanthropic giving. The magnitude of the subsidy is a function of the amount of unrealized appreciation in relation to the basis of the property and the taxpayer’s rates of tax, being greatest for taxpayers in highest brackets and with most appreciation.” William D. Andrews, Personal Deductions in an Ideal Income Tax, 86 Harv. L. Rev. 309, 372 (1972).
177 For example, the special reduction rules discussed in the text accompanying notes Error: Reference source not found-Error: Reference source not found, supra, tend to limit the deduction to the adjusted basis of the donated property.
178 In other contexts, charitable gifts sometimes trigger gain to the donor. For example, charitable donations of installment obligations accelerate gain to the donor. Rev. Rul. 60-352, 1960-2 C.B. 208; Rev. Rul. 55-157, 1955-1 C.B. 293. Charitable donations of property subject to indebtedness also trigger gain to the donor. Rev. Rul. 81-163, 1981-1 C.B. 443.
179 See Paul R. McDaniel, Federal Matching Grants for Charitable Contributions: A Substitute for the Income Tax Deduction, 27 Tax L. Rev. 377 (1972).
180 It is assumed for purposes of this simplified example that no special reduction rules, deduction floors, or other limitations or adjustments are applicable.
181 For example, the same regressivity occurs when a sole proprietor deducts expenses, e.g., for salaries and rent, incurred in business: a higher-income proprietor gets a greater benefit from those deductions than a lower-income proprietor.
183 For further discussions of a credit rather than a deduction for charitable giving, see Charles T. Clotfelter, Federal Tax Policy and Charitable Giving 44, 103-04 (1985); Mark P. Gergen, The Case for a Charitable Contributions Deduction, 74 Va. L. Rev. 1393, 1400-06 (1988); Peter J. Wiedenbeck, Charitable Contributions: A Policy Perspective, 50 Mo. L. Rev. 85, 100-02 (1988); John K. McNulty, Public Policy and Private Charity: A Tax Policy Perspective, 3 Va. Tax Rev. 229, 245-47 (1984).
184 The estate tax, of course, exerts a price effect on bequests, even though it only reaches fairly large estates. Some simulations have suggested that repeal of the estate tax would reduce testamentary charitable gifts by between 24 percent and 44 percent. Charles T. Clotfelter & Richard L. Schmalbeck, The Impact of Fundamental Tax Reform on Nonprofit Organizations, in Economic Effects of Fundamental Tax Reform 211-43 (Henry J. Aaron & William G. Gale eds. 1996). Others disagree, believing that the wealth effect would overwhelm the price effect. For a more recent analysis, see Jon Bakija, William Gale & Joel Slemrod, Charitable Bequests and Taxes on Inheritance and Estates: Aggregate Evidence from Across States and Time (NBER Working Paper No. w9661, May, 2003).
185 See generally Richard Steinberg, Taxes and Giving: New Findings, 1 Voluntas 61 (1990); Charles T. Clotfelter, Federal Tax Policy and Charitable Giving (1985).
186 See the example in the text accompanying note Error: Reference source not found, supra.
187 An April 1999 conference at the Urban Institute convened economics experts who explored this issue. A consensus emerged that there was “much uncertainty” about price elasticity, and that the issue “is far from settled.” Joseph Cordes, The Cost of Giving: How do Changes in Tax Deductions Affect Charitable Contributions?, Emerging Issues in Philanthropy (Urban Institute 1999).
188 See Charles T. Clotfelter, The Economics of Giving, in Giving Better, Giving Smarter ch. 4 (J.W. Barry & B.V. Manno, eds., 1997).
189 Donors of money or property are also more likely to volunteer their time. Some empirical work suggests, therefore, that beyond the price elasticity (which only measures price impact on gifts of money or property), a reduced price for donations also tends to encourage more volunteering. Eleanor Brown & Hamilton Lankford, Gifts of Money and Gifts of Time, 47 J. Public Econ. 321 (1992). See also Ellen P. Aprill, op. cit. supra note Error: Reference source not found, at 862-64.
190 Steinberg, ___, in ___ (Ben-Ner & Anheier, eds., forthcoming).
191 Panel data are longitudinal, as opposed to cross-sectional data which are static.
192 Gerald E. Auten, Holger Sieg & Charles T. Clotfelter, Charitable Giving, Income, and Taxes: An Analysis of Panel Data, 92 Amer. Econ. Rev. 371 (2002).
193 Id. at 379.
194 Id. at 381.
195 David H. Eaton, Charitable Contributions and Tax Price Elasticities for Nonitemizing Taxpayers, 7 Int’l Advances Econ. Res. 431 (2001); Christopher M. Duquette, Is Charitable Giving by Nonitemizers Responsive to Tax Incentives? New Evidence, 52 Nat’l Tax J. 195, 203-04 (1999); Charles T. Clotfelter & C. Eugene Steuerle, Charitable Contributions, in How Taxes Affect Economic Behavior (Henry J. Aaron & Joseph A. Pechman eds., 1981). But see Amy E. Dunbar & John Phillips, The Effect of Tax Policy on Charitable Contributions: The Case of Nonitemizing Taxpayers, 19 J. Amer. Tax’n Ass’n 1 (1997). See also Congressional Budget Office, Effects of Allowing Nonitemizers to Deduct Charitable Contributions 9-11 (2002).
196 Independent Sector argues that “the nonitemizer deduction included in the Charity Aid, Recovery, and Empowerment Act of 2002 would likely stimulate at least $1.15 of charitable giving for every $1.00 it costs.” Fact Sheet, Giving In America 4 (2002), http://www.independentsector.org/PDFs/issue_brief.pdf. For a useful analysis of these issues, see Ellen R. Aprill, op. cit. supra note Error: Reference source not found, at 857-59.
197 For a very thoughtful series of articles on how best to design a nonitemizer deduction, see C. Eugene Steuerle, Charity Deduction for Nonitemizers: Where do You Draw the Line?, 86 Tax Notes 1773 (Mar. 20, 2000); C. Eugene Steuerle, Nonitemizers Charitable Deduction: The Administration’s Floor Plan, 86 Tax Notes 1625 (Mar. 13, 2000); C. Eugene Steuerle, The Right Way to Extend Charitable Deductions to Nonitemizers, 86 Tax Notes 1297 (Feb. 28, 2000). The author has pondered these issues for more than a decade. See, e.g., C. Eugene Steuerle, Allowing Charitable Deductions for Those Who Don’t Itemize, 48 Tax Notes 633 (1990). See also Joseph Cordes, John O’Hare & C. Eugene Steuerle, Extending the Charitable Deduction to Itemizers: Policy Issues and Options, Charting Civil Society, No. 7 (2000), available at . For a more recent overview of the issues, see Congressional Budget Office, Effects of Allowing Nonitemizers to Deduct Charitable Contributions (2002).
198 See the discussion of these administrative concerns in Ellen P. Aprill, op cit. supra note Error: Reference source not found, at 859-62.
199 The imposition of a ceiling, rather than a floor, on such deductions appears unwise: although a ceiling would mitigate the expected adverse tax revenue impact, it fails to respond to the other policy considerations mentioned in the text.