A Historical Review and Prospective Modern-Day Assessment of the Non-Itemizer Charitable Contribution Deduction

Abstract

ABSTRACT The direct charitable contribution deduction was an experimental deduction for the 1982–1986 tax years. It represents the only example in the tax laws in which non-itemizers were allowed a charitable contribution deduction in tandem with the standard deduction. This article offers a review of three distinct eras in tax history: the advent of the standard deduction, the enactment of the direct charitable contribution deduction, and its subsequent abandonment. This article clarifies the literature to demonstrate that the direct charitable contribution's demise was not a matter of course. The deduction was made permanent by the House of Representatives. Its extension was the subject of rigorous debate in the Senate and was tabled by only a few votes. This article also considers the prospect of a modern-day direct charitable contribution. Taken on balance, concerns of economic necessity, fiscal viability, and measurable impact on the charitable sector suggest that reinstatement is neither necessary nor a prudent tax subsidy. Modern-day data indicate that non-itemizers are already giving. The tax incentive, therefore, proffered through the non-itemizer charitable contribution deduction would likely have relatively minimal effect on the charitable sector.