According to Cordes, O’Hare and Steuerle the table above represented the change that occurred in tax revenue and charitable giving based on four options. In option one, if all non-itemizers were allowed to deduct their charitable contributions starting from the first dollar given the results support previous claims that the increase in giving to charities does not outweigh the cost of tax revenue (3). Option two took a different approach and proposed to add a floor of $500 to those non-itemizers who file jointly and $250 for those who file single. In order to take a deduction, the contribution had to be in excess of the floor set for the individual. By limiting the deduction, it is seen that the revenue cost became lower while the amount of extra giving that was encouraged did not significantly increase considering the floor provided the subsidy to extra giving rather than giving that would have occurred without any incentive (Cordes, O’Hare & Steuerle 4). Option three was similar to option two, however, the floor was set for both itemizers and non-itemizers. Here it is shown that the amount of predicted extra giving by non-itemizers would exceed the revenue costs, making this option ideal from an administration standpoint (Cordes, O’Hare & Steuerle 4).
