Tax-refund schemes may not boost donations as expected, altering welfare effects.
The article examines how tax deductions can encourage people to donate to public goods. The study looks at how these deductions affect donations and overall welfare. The findings show that the impact of tax deductions on donations and welfare depends on the tax system and individual preferences. While tax deductions can lead to better outcomes for some, others may not benefit. The study suggests that current tax refund schemes may not be the best way to increase donations.