Would you give more to charity if there was more of a tax incentive to do so? Because those incentives may just be on their way.
The Standing Committee on Finance have been meeting monthly since March in Ottawa to discuss the possibility of increasing the current tax incentives for charitable donations to encourage more giving. They are giving consideration to:
- Changing the tax credit amount
- Reviewing the possible extensions of the capital gains exemption to private company shares and real estate when donated to a charitable organization
- The feasibility and costs of implementing these and other measures
There’s no doubt additional tax incentives would be beneficial for those who already give big to charity. For those who donate shares and real estate, even better. It could also put us on a slippery slope, leading to an expectation that new tax incentives will be announced regularly. It also begs the question: Are people giving for good or for their own benefit? Decisions to give to charity could easily become more about “tax planning” and less about true “altruism.”
We have to consider the cost to government as well. At a time when they are cutting back on social services and other types of social spending, they would lose more revenue by further underwriting charitable donations. So what would give in its place – would tax payers be expected to make up the new void by giving more, thereby nullifying the net benefit to society?
While offering people a larger tax incentive to give to charity sounds like an immediate win, there are multiple factors to consider. And the debate continues on Parliament Hill.
Are the debates worthwhile – would more tax breaks make you give more to charity? And is giving more to charity necessarily the best answer to society’s problems?