Estimates the impact of taxes on donations based on dynamic specifications and data on a large panel of middle-class taxpayers followed over a period of time that included two major tax reforms (1979-1986). Finds that taxes determine both the long-run level and the timing of donations....

Reports compelling empirical support for portraying giving as a dynamic activity and that the charitable deduction should not be restricted or eliminated. Attempts to provide additional insight into taxation's net effect on giving using only a synthesis of prior panel studies.