Effects on Charitable Giving
The Estate Tax and the Philanthropic Sector
Under current law, the Federal estate tax will diminish through 2009 as rates fall and the amount of wealth exempt from the tax increases. The tax then disappears entirely in 2010 but returns the following year to levels set by 1997 law. Those changes will affect not only estate tax revenues but also donations to charity. A person with a taxable estate who makes charitable donations, either during life or at death, reduces the size of his or her estate and thus lowers the estate tax liability. As a result, the person faces a lower effective cost of giving, which…
