While Canada is looking to increase tax incentives for charitable giving, the United States is doing the opposite; President Obama’s tax plan would see charitable deductions cut.
At first consideration, Canada’s policy appears more generous to the public. But is it?
The proposed tax adjustment in the US will limit wealthy taxpayers to writing off 28% of their itemized deductions, including charitable gifts. This will be down from the current 35%. And it only applies to people with incomes great than $200,000. (Source)
There isn’t a figure tied to possible tax credits in Canada yet. But it’s only one of the changes relating to non-profit organizations the government is considering; others are new tax rules for charities to raise money through side businesses and making them more financially accountable through measured objectives.
With these changes, the government intends to not only reshape the non-profit sector, but how it’s supported by our society. The ultimate goal, taking its cue from the UK’s new Big Society program, is to shift the power and responsibility of supporting social causes from the government to the public – another topic unto itself.
Charities in both countries are saying they’ll take a hit if and when the new policies are approved. Time will tell who fares better, but do you have any predictions?
Read more about Canada’s proposed new rules for non-profits.