Estate Tax Cut Won’t Hurt Giving, Scholar Says

BY ELIZABETH SCHWINN

As many nonprofit groups mobilize against repeal of the estate tax, a scholar at the Heritage Foundation, a think tank in Washington, argues that eliminating the tax would not hurt charities.

Stuart Butler says that even if Congress eliminated the estate tax, giving would not change significantly.

Economic research supports the theory that donors deliberately plan to bequeath a certain amount of their assets to their children and give the rest to charity, Mr. Butler says. That, in turn, implies that if donors were not subject to the estate tax there would be more left for charity after bequests to heirs were made, he says.

The biggest impact on giving comes not from tax rates but from income levels, Mr. Butler says. In general, he says, tax cuts mean that people will make more money and thus give more to charity.

The full text of Mr. Butler’s paper, “Why the Bush Tax Cuts Are No Threat to Philanthropy,” can be found at http://www.heritage.org/library/backgrounder/bg1417es.html. It is also available from the Heritage Foundation at 214 Massachusetts Avenue N.E., Washington, D.C. 20002; (202) 546-4400.