Title: Do tax deductions encourage charitable giving behavior in the canton of Geneva?
Authors: Marta Pittavino - University of Geneva (Switzerland) [presenting]
Giedre Lideikyte Huber - University of Geneva (Switzerland)
Abstract: Under the current Swiss law, taxpayers can deduct charitable donations from their taxable income (individuals) or profits (corporations) subject to a 20\%-threshold. This deductible threshold was increased and introduced in 2006, as part of a larger reform of the Swiss federal tax law, replacing the previous 10\%-threshold. The goal of the reform was to boost charitable giving to non-profit entities. However, the efficiency of this reform, and more generally of the existing Swiss system of tax deductions for charitable giving has never been evaluated. Using unique panel data, shared by the Geneva Tax Administration for a time framework of 11 years, an in-depth statistical analysis was conducted. Overall gross income, wealth, together with the year of birth, were the main covariates of interest. Several linear regression models were performed and significant variables, which help answer the questions of taxpayers charitable giving behavior, were identified. Taxpayers were divided into six categories according to the income distribution. We studied the changes in the volume of deductions between categories. The aim is to provide as many taxation insights as possible into both the effects of the 2006 reform, as well as into the patterns of giving and deducting by different classes of taxpayers by income and wealth. The purpose is to provide both Swiss and foreign academics and policymakers with new research and policy insights.