Framing effects of tax expenditure on charitable giving.

• Main Authors: Koh, Charlene Li Lian., Tan, Jeremy Kheng Yong., Tan, Kenneth Tse Wei.
• Other Authors: Poh, Eng Hin
• Format: Final Year Project
• Published: 2008
• Subjects: DRNTU::Business::Accounting::Tax
• Online Access: http://hdl.handle.net/10356/10467
• Institution: Nanyang Technological University

Our research seeks to investigate whether government expenditure through the tax system is more effective in the local community in encouraging charitable giving when tax deductions are offered, as compared to the use of direct subsidies or matching contributions. This paper documents the findings of a survey experiment carried out to investigate people’s perceptions and preferences towards various forms of subsidies which are provided to encourage charitable giving. Consistent with the previous studies on framing effects, our findings revealed that when framed with the use of the tax system, respondents reported a greater influence as compared to a direct cash subsidy. A reduction in taxable income was also the preferred choice among the two types of tax treatment proposals with reductions in taxes being the other treatment. We also show that the greater effectiveness of matching subsidies over direct rebates occur in the Singapore context. However when placed against frames involving the use of the tax system, respondents clearly prefer the latter.